Reference no: EM132935586
Question - On July 1, 2013, Jennifer 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 intangible asset which was undervalued on the investee's statement of financial position and which had a remaining useful life of 5 years.
For the year ended December 31, 2013, the investee reported net income of P6,000,000 and paid cash dividends of P1,000,000 on ordinary shares capital and issued 10% stock dividend on December 31, 2013.
Required - What is the carrying amount of the investment in associate on December 31, 2013?
a. 5,900,000
b. 5,400,000
c. 5,300,000
d. 5,800,000
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