Reference no: EM132836380

Questions -

Q1. Baby Co. purchased equipment on Jan 1, 2020 for P5,000,000. The equipment had useful life of 5 years and residual value of P600,000. The policy is to depreciate 5-year assets using the 200% double declining mehod for the first 2 years and then switch to straight line. What amount should be reported as accumulated depreciation on Dec. 31, 2020?

Q2. On July 1, 2020, ANAN Company acquired 20% of the outstanding ordinary shares of another entity for P5,000,000. The carrying amount of the acquired shares was P4,000,000. The excess of cost over carrying amount was attributable to an identifiable asset which was undervalued on the investees statement of financial position and which had a remaining useful life of 5 years. The investee reported net income of P6,000,000 for 2020, of which P4,000,000 was for the last six months of the year and paid cash dividends of P1,000,000 on ordinary shares and issued 10% stock dividend on December 31, 2020. What is the carrying amount of the investment in associate on Dec 31, 2020?