Prepare journal entries for the current year

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Question - At the beginning of current year, Divine company acquired 40% of the outstanding ordinary shares of an investee for 6,500,000. The carrying amount of the net assets of the investee equaled 12,500,000.

Any excess of cost over carrying amount is attributable to equipment with remaining useful life of 10 years.

During the year, the investee reported net loss of 4,000,000 and paid dividends of 2,500,000.

Required -

1. Prepare journal entries for the current year.

2. Compute the carrying amount of the investment at year-end.

Reference no: EM132968805

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