On July 1, 2020, GREEN Company acquired 20% of the outstanding ordinary shares of another entity for ₱5,000,000. The carrying amount of the acquired shares was ₱4,000,000. The excess of cost over the 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. The investee reported net income of ₱6,000,000 for 2020 and paid cash dividends of ₱1,000,000 on ordinary shares and issued 10% stock dividend on December 31, 2020. What amount of investment income should be reported by GREEN for 2020?*₱ 500,000₱ 800,000₱ 1,000,000₱ 300,000

Investment can be defined as allocation of excess fund for gaining returns in future. The investment…

Answered: On July 1, 2020, GREEN Company acquired…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

On July 1, 2020, GREEN Company acquired 20% of the outstanding ordinary shares of another entity for ₱5,000,000. The carrying amount of the acquired shares was ₱4,000,000. The excess of cost over the 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. The investee reported net income of ₱6,000,000 for 2020 and paid cash dividends of ₱1,000,000 on ordinary shares and issued 10% stock dividend on December 31, 2020. What amount of investment income should be reported by GREEN for 2020?*

₱ 500,000

₱ 800,000

₱ 1,000,000

₱ 300,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions