INVESTMENT IN ASSOCIATE. 1. On Janvary 1, 2019, an entity purchased 40% of the outstanding ordinary shares of another entity for P5,000,000 when the net assets of the investee amounted to P10,000,000. \ At acquisition date, the carrying amounts of the identifiable assets and liabilities of the investee were ‘equal to fair value, except for land whose the fair value was P2,000,000 greater than carrying amount and inventory whose fair value was P1,500,000 greater than cost. inventory was sold during 2019. The land was sold in 2019 and one-half of During 2019, the investee reported net income of P8,000,000, issued 10% share dividend and paid cash dividend of P2,500,000. © 1, What isthe investment income for 2019? ea. eev0,0ee my we — (0,603 ne Scgcoo kw wea. £00,209 WW Zen000 ww ea, 300,000, ae a wwe. 400 208 © 2,500,000 "Ceeleccy Camager) ME» 400,00 d. 3,300,000 (evo, 000) Ci-smx aor) “eo.c00) SkceAs FY wuts 20, 3,wedeo 4,160,000 (iis What is the carrying amount of the investment on December 31, 2019? a] ate 1,002,000 6500000 2 ats ne (Ht be) ©. 7,200,000 d._ 7,300,000 Q 4 2. On January 1, 2019, an entity acquired 40% of the ordinary shares of an associate. On such date, assets and liabilities of the investee were recorded at fair value and the acquisition showed that goodwill of P1,000,000 was acquired. The investee reported net income of P8,000,000 for 2019. In December 2019, the investee sold inventory costing P3,000,000 to the investor for P5,000,000. \ The inventory remained unsold by the investor on December 31, 2019. On January 1, 2019, the investee sold an equipment to the investor with carrying amount of 2,500,000 for P4,000,009. The remaining life of the equipment is 5 years. ‘What amount of investment income should be reported for 2019? Cu 2Iee-? INVESTOR UrstneAsA | ¥,000,00~ a. 1,920,000 5 coc,coo Cryeoss see > B. 1,800,000 (3,081 veo) Ci Ste, 400) (40-265) ¢. 3,200,000 “Feo, oo 300, 080 Cusm/s > 2,400,000 F806, 08k Gor, = I, 42,009 ry 1% 3. An entity owned 100% of another entity’s preference shares and 20% of ordinary shares. The investee’s share capital outstanding on December 31, 2019 included P5,000,000 of 10% cumulative preference shares and P 10,000,000 of ordinary shares. The investee reported net income of P8,000,000 for 2019. No dividend was declared for both preference and ordinary shares in 2019. ‘What amount should be reported as investment income for 2019? a. 1,600,000 ¥:#02re0e b. 1500;000 —{2or29e2 (Feax tor.) ¢. 2,000,000 4. 1,000,000 Scanned with CamScanner~ On January 1, 2019, an entity acquired a 10% interest in en i i » 2019, interest in an investee for 3,000,000. The investment Was accounted for under the cost method. During investee reported net i f 4,000,000 and paid dividend of P1,000,000. pine _ akin —~ 1, 2020 the entity acquired a further 15% interest in the investec for P8,500,000. On such Tong 12S cating amount ofthe net asses of the invesice was P36,000,000 and the fir value ofthe ‘existing interest was P3,500,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value was P4,000,000 greater than carrying amount. The equipment had a remaining life of 5 years. The investee reported net income of P8,000,000 for 2020 id dividend of P6,000,000 pete pt 1 2020 and paid dividend of P6,000,000 on 1. What amount of investment income should be recognized in 2019? wy ea, 3,600,000 a. 400,000 a ee b. 100,000 “** B.voqcoe «. 500,000 “i (00,00 ; 4. 300,000 NS feo, cow Ctx toy.) 2. What total amount of income should be recognized by the investor in 2020? a 2,000,000" fash Fe reac MMU Ass00 ae Bb. 2,500,000, mv. 2a sus.co. we wba er ©. 2,300,000 -An-ple iS Py sk toe Scent Gocoret “2, e20,060 d. 1,800,000 3. What is the carrying amount of the investment in associate on December 31, 2020? O 152.000 3,520,000 a 12,300,000 "24 -t/. B. 12,500,000 pats ibess” ©. 13,800,000 d. 12,900,000 ™ On January 1, 2019, an entity acquired 30% of the voting share capiial of another entity for 2,000,000 which was equal to the carrying amount of interest acquired. The investee reported net income of P1,500,000 for 2019 and paid dividend of P500,000 on December 31, 2019. ‘The investee reported net income of P1,000,000 for the six months ended June 30, 2020 and 2,500,000 for the year ended December 31, 2020 but paid dividend of P1,000,000 on October 1, 2020. ‘On July 1, 2020, the investor sol: f of the investment for P2,000,000. The fair value of the retained investment is P2,200,000 on |, 2020 and P2,400,000 on December 31, 2020. The retained investment is to be measured at FVPL. 1, Whatis the carrying amount of the investment before the disposal on June 30, 2020? 8, 2,600,000 73/282 ew, c00x 907 b. 2,300,000 cisvioee) T2004 20 ©. 2,450,000 dwcoat | ee, 30". d. 2,750,000 : 2, What amount of gain on sale of investment should be reported for 2020? a. 950,000 toverede, Y +3 /1)19 b. 700,000..." ¢. 775,000 d, 500,000 3, What total amount of income should be reported in 2020? a. 2,250,000 302°" b. 2,100,000 gos aoe c. 1,950,000 d. 2,050,000 6667 Scanned with CamScanner| Gackoe Mamas 1 | tue in cher equity chemegs Ob The hal a 2 Map rar (yin aie Tac las- ayes x Rly Mitol 2 Sue ne Inc as, X | lyse A O Yc" Momo Sab A 2 wens: Ins tun ane Scanned with CamScanner5 6. Chath Dv: hat lui asec. | x @ StaeViv Wena Soy | q Ter 4 xeess wot lun Ke k x fu meee 4 Exes EY Ive inasmt. X Gan fucken) (mine, X Scanned with CamScanner“pyefad aruda er yy GA e a ol, shakes rz > . ” libel (e 4 ye th adit “ oF Voy shoes Scanned with CamScanner| OES.) Sng. Ince oo Gh. Vseunhune 4 Mebfad \Welaseity 1p. Poncd [nv etme y GNC | noes tp EV. ie bi hryadi oUF. 40. it Scanned with CamScannerbeedte LUD Lo XG bey @& Scanned with CamScannerScanned with CamScanner