Write the complete solutions legibly. Problem 2. On January 1, 2023, Hi-Supreme Company acquired 40% of the ordinary shares of an associate forP15,800,000. All the identifiable assets and liabilities of the associate were recorded at fair value. The analysis ofthe acquisition showed that goodwill of P2,500,000 was acquired. The net income and dividend of the associatewere as follows:20232024Cash dividend paid12,000,00016,200,000Net income20,500,00027,800,000In December 2023, the associate sold inventory to Hi-Supreme Company for P2,500,000. The cost of theinventory was P1,800,000. The inventory remained unsold by Hi-Supreme Company on December 31, 2023.However, it was sold by Hi-Supreme Company in 2024. In December 2024, the associate sold inventory to Hi-Supreme Company for P3,200,000. The cost of the inventory was P2,900,000. This inventory remained unsold byHi-Supreme Company on December 31, 2024.How much is the investor's share in profit of the associate for 2023? 7,970,00How much is the carrying amount of the investment in associate on December 31, 2023? 18,92 MHow much is the carrying amount of investment in associate on December 31, 2024?23.72M

Consolidations:Consolidations refer to the method or financial strategy that empowers a company to…

uisition showed that goodwill of P2,500,000 was acquired. The net income and dividend o s follows: 2023 2024 Cash dividend paid 12,000,000 16,200,000 Net income 20,500,000 27,800,000 December 2023, the associate sold inventory to Hi-Supreme Company for P2,500,000. The cost entory was P1,800,000. The inventory remained unsold by Hi-Supreme Company on December

uisition showed that goodwill of P2,500,000 was acquired. The net income and dividend o s follows: 2023 2024 Cash dividend paid 12,000,000 16,200,000 Net income 20,500,000 27,800,000 December 2023, the associate sold inventory to Hi-Supreme Company for P2,500,000. The cost entory was P1,800,000. The inventory remained unsold by Hi-Supreme Company on December

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 24E

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A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
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