Reference no: EM132976667

Questions -

Q1. On January 1, 20X9, Ramos Company purchased 20% of Pascual Company's ordinary shares outstanding for P3,000,000. The acquisition cost is equal to the carrying amount of the net assets acquired. During 20X9, the investee reported net income of P3,500,000 and paid cash dividend of P2,000,000. What is the balance in the investment in associate on December 31, 20X9?

Q2. On January 20X9, Gozon Company acquired 20% of outstanding ordinary shares of Lee Company for P8,000,000. This investment gave Gozon the ability to exercise significant influence over Lee. The carrying amount of the acquired shares was P6,000,000. The excess of cost over the carrying amount was attributed to a depreciable asset, which was undervalued on Lee's statement of financial position and which had remaining useful life of 10 years. For the year ended December 31, 20X9, the investee reported a net income of P1,800,000 and paid cash dividends of P400,000 and thereafter issued 5% stock dividend. What is the carrying amount of the investment in associate on December 31, 20X9?