Company acquires 35% of the 100,000 outstanding shares of Happy Company for P1,200,000. Happy Company’s net identifiable assets are fairly valued on this date. In 2021, Happy Company reports profit of P1,500,000 and declares and pays cash dividends of P600,000. For the year ended December 31, 2021, how much should Sad Company report as share in the associate’s profit and investment in associate, respectively? 175,000 ; 1,165,000 210,000 ; 1,200,000 350,000 ; 1,340,000 131,200 ; 1,121,250
Company acquires 35% of the 100,000 outstanding shares of Happy Company for P1,200,000. Happy Company’s net identifiable assets are fairly valued on this date. In 2021, Happy Company reports profit of P1,500,000 and declares and pays cash dividends of P600,000. For the year ended December 31, 2021, how much should Sad Company report as share in the associate’s profit and investment in associate, respectively? 175,000 ; 1,165,000 210,000 ; 1,200,000 350,000 ; 1,340,000 131,200 ; 1,121,250
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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14.On September 1, 2021, Sad Company acquires 35% of the 100,000 outstanding shares of Happy Company for P1,200,000. Happy Company’s net identifiable assets are fairly valued on this date. In 2021, Happy Company reports profit of P1,500,000 and declares and pays cash dividends of P600,000. For the year ended December 31, 2021, how much should Sad Company report as share in the associate’s profit and investment in associate, respectively?
175,000 ; 1,165,000
210,000 ; 1,200,000
350,000 ; 1,340,000
131,200 ; 1,121,250
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