2019

Investment in shares
Cash

2020

Investment in Associate
Cash

Investment in shares
Gain on remeasurement to equity (4,500,000-3,000,000)

Investment in Associate
Investment in shares (3,000,000 + 1,500,000)

Investment in Associate
Investment Income (8,000,000 x 25%)

Cash
Investment in Associate (5,000,000 x 25%)

Investment income
Investment in Associate (1,000,000/5)

2019
a. Investment in Associate
Cash
to record the investment

b. Investment in Associate
Investment Income (1,500,000 x 30%)
to record the share in net income

c. Investment Income
Investment in Associate (500,000 x 30%)
to record the share in cash dividend
Jan 2020- June 2020
a. Investment in Associate
Investment income (1,000,000 x 30%)
to record the share in net income

July 2020- December 2020

b. Cash
Investment in Associate (2,600,000/2)
Gain on sale of investment
to record the sale of investment

c. Investment in Associate
Gain from remeasurement to fair value
to record the remeasurement of investment

d. Financial Asset- FVPL

Investment in Associate
to reclassify the retained investment

e. Cash
Dividend Income (1,000,000 x 15%)
to record dividend income

f. Financial Asset- FVPL

Unrealized gain
to record an increase in fair value

Net income in 2019

Unrealized profit on sale of equipment sold on January 1, 2019
(800,000-500,000)
Realized profit on equipment sold on January 1, 2019
(300,000 x 10%)

ADJUSTED NET INCOME FOR 2019

Multiply b equity interest
Investor's share in profit for 2019

Net income in 2019

Realized profit on equipment sold on January 1, 2019
(300,000 x 10%)
 Unrealized profit on sale of equipment on July 1,2020
(900,000-500,000)
Realized profit on equipment sold on July 1,2020
(400,000 / 5 X 1/2)
Unrealized profit on ending inventory on December 1, 2020
(2800000-2000000)

ADJUSTED NET INCOME FOR 2019

Multiply b equity interest
Investor's share in profit for 2019

5,000,000.00
INVESTMENT IN ASSOCIATE 2020 692,000.00
Acquisition cost 748,000.00
Share in profit 2019 6,440,000.00
Share in profit 2020 5,720,000.00

CA of Investment in Associate 2020

3,000,000.00 Fair value of 10% existing interest
3,000,000.00 Cost of 15% new interest

Total Cost of Investment

Carrying amount of net assets acqu
6,750,000.00 (25% x 36,000,000)
6,750,000.00
Excess atributable to equipment(4,
1,500,000.00 Goodwill
1,500,000.00
Fair value of 10% existing interest
4,500,000.00 Cost of 15% new interest
4,500,000.00 Share in income

2,000,000.00 Cash dividends

2,000,000.00 Undervalued equipment
Carrying Amount of Investment in
1,250,000.00
1,250,000.00
Fair value of 10% interest
200,000.00 Cost of 10% interest
200,000.00 Gain on remeasurement to equity

Investment in shares
Gain on remeasuremen

2,000,000.00
2,000,000.00
a.
b.
450,000.00
450,000.00

150,000.00
150,000.00
 300,000.00 Carrying amount December 31, 201
300,000.00 a. Share in income - June 30, 2020
Carrying amount June 30, 2020

b. Sales price
2,000,000.00 Carrying amount of investment sol
1,300,000.00 Gain on sale
700,000.00
c. Fair value of retained investment
Carrying amount of retained invest
900,000.00 Gain from remeasurement to fair v
900,000.00
b. Gain on sale
c. Gain on remeasurement
2,200,000.00 a. Share in income - June 30, 2020
2,200,000.00 e. Dividend Income (1,000,000 x 15%
f. Increase in fair value on Dec. 31, 20
TOTAL INCOME
150,000.00
150,000.00

200,000.00
200,000.00

2,000,000.00
(300,000.00)

30,000.00

1,730,000.00
40%
692,000.00

3,000,000.00
30,000.00
 (400,000.00)

40,000.00

(800,000.00)

1,870,000.00
40%
748,000.00

320,000.00 Cash dividend 2019

400,000.00 Cash dividend 2020

720,000.00
of 10% existing interest 4,500,000.00
% new interest 6,750,000.00

of Investment 11,250,000.00
mount of net assets acquired
(25% x 36,000,000) (9,000,000.00)

butable to equipment(4,000,000 x 25%) (1,000,000.00)

1,250,000.00

of 10% existing interest 4,500,000.00

% new interest 6,750,000.00
2,000,000.00

(1,250,000.00)
ed equipment (200,000.00)
mount of Investment in Associate 11,800,000.00

of 10% interest 4,500,000.00

(3,000,000.00)
measurement to equity 1,500,000.00

1,500,000.00
Gain on remeasurement to equity (4,500,000-3,000,000) 1,500,000.00

INVESTMENT IN ASSOCIATE 2019

2,000,000.00 c. 150,000.00
450,000.00
2,450,000.00 150,000.00
2,300,000.00
mount December 31, 2019 2,300,000.00
come - June 30, 2020 300,000.00
mount June 30, 2020 2,600,000.00

2,000,000.00
mount of investment sold 1,300,000.00
700,000.00

of retained investment 2,200,000.00

mount of retained investment 1,300,000.00
remeasurement to fair value 900,000.00

700,000.00
measurement 900,000.00
come - June 30, 2020 300,000.00
ncome (1,000,000 x 15%) 150,000.00
n fair value on Dec. 31, 2020 200,000.00
2,250,000.00
Income reported 2019 ###
Equity interest 30%
Share in net income 2019 ###

Investment in Associate ###

Investment Income (1,500,000 x 30%) ###
to record the share in net income