Reference no: EM132830804

Question - John Company purchased 20,000 ordinary shares of PaulJoint Venture, Inc. for P3, 360,000 representing 20% interest in joint venture on January 1, 2014.

In 2014, PaulJoint Venture, Inc. reported a net income P2, 100,000. On the same year, John Company Received a 10% stock dividend from Paul Joint Venture, Inc. In 2015, PaulJoint Venture, Inc. reported a net loss of P4, 200, 000. Paul Joint Venture, Inc. paid a cash dividend of P700, 000 to ordinary shareholders on December 31, 2015. On December 31, 2015, John Company sold 5, 500 ordinary shares of PaulJoint Venture, Inc. at P280 per share.

1) What the gain in sale if investment in joint venture?

a) 651,000

b) 630,000

c) 574,700

d) 562,100

2) What the balance of investment in joint venture after the sale?

a) 2,667,000

b) 2,646,000

c) 2,590,700

d) 2,578,100