Reference no: EM132937589

Questions -

Q1) On January 1, 2019, Rina Company purchased 40% of the outstanding ordinary shares of another entity for P5,000,000 when the net assets of the investee amounted to P10,000,000. At acquisition date, the carrying amounts of the identifiable assets and liabilities of the investee were equal to their fair value, except for equipment for which the fair value was P2,000,000 greater than carrying amount and inventory whose fair value was P1,000,000 greater than the cost. The equipment has a remaining life of 5 years and the inventory was all sold during 2019. The investee reported net income of P6,000,000 for 2019 and paid no dividends. What amount of Share in Profit of Associate to be reported in 2019?

Q2) On January 1, 2019, Big Bang Company acquired a nontrading equity investment for P5,000,000. On December 31, 2019, the market value of the investment was P4,000,000. On December 31, 20200, the issuer of the equity instrument was in severe financial difficulty and the fair value of the entity investment had fallen to P2,300,000. What amount of cumulative loss should be reported in the statement of changes in equity for 2020 as component of other comprehensive income if the investment is designated ad measured at FVTOCI?