On January 1, 2021, Herwin Company acquired 40%of GIC Company by purchasing 8,000 shares for P1,440,000. On the date of acquisition, Herwin calculated that its share of the excess of the fair value over the book value of GIC's depreciab assets was P150,000 and that the purchased goodwill was P120,000. At the end of 2021, GIC reported profit of P450,000 and paid dividends of P7.00 per share. Herwin depreciates its depreciable assets over 12-year remaining life. What is the amount of income Herwin Company would report from its investment in GIC for the year ended December 2021? (A) P105,500

On January 1, 2021, Herwin Company acquired 40%of GIC Company by purchasing 8,000 shares for P1,440,000. On the date of acquisition, Herwin calculated that its share of the excess of the fair value over the book value of GIC's depreciab assets was P150,000 and that the purchased goodwill was P120,000. At the end of 2021, GIC reported profit of P450,000 and paid dividends of P7.00 per share. Herwin depreciates its depreciable assets over 12-year remaining life. What is the amount of income Herwin Company would report from its investment in GIC for the year ended December 2021? (A) P105,500

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 62P

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