What is the investment balance at December

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Question - DURIAN CORP. purchased 40% of Associate Company's outstanding ordinary shares on January 2, 2012, for P270 million. The book value of Associate Company's net assets (shareholders' Equity) at the purchase date totaled P450 million. Book Values and Fair values were the same for all financial statement items except for inventory and buildings, for which fair values exceed book values by P12.5 million and P112.5 million, respectively. All inventory on hand at the purchase date was sold during Associate Company reported net income of P110 million for the year ended December 31, 2012, and paid cash dividends of P40 million. The fair value of Durian's investment in associate was P300 million at December 31, 2012.

Required -

1. What is the investment balance at December 31, 2012?

A. P270 million

B. P300 million

C. P290 million

D. P298 million

2. At what amount will Durian Corp. report its investment income in its 2012 income statement?

A. P44 million

B. P36 million

C. P20 million

D. P16 million

Reference no: EM132980846

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