Question
Cucumber Corp. bought 40% of the outstanding ordinary shares of Super Company on January 2, 2018. At the date of purchase, the book value of
Cucumber Corp. bought 40% of the outstanding ordinary shares of Super Company on January 2, 2018. At the date of purchase, the book value of Super's net assets was P77.5 million. The book values and fair values for all statement of financial position items were the same except for inventory and plant facilities. The fair value exceeded book value by P500,000 for the inventory and by P2 million for the plant facilities. The estimated useful life of the plant facilities is 8 years. All inventory acquired was sold during 2018.
Super reported net income of P14 million for the year ended December 31, 2018, and paid a cash dividend of P3 million. Cucumber's statement of financial position as of December 31, 2018, shows an amount of P44.1 million as its investment in Super Company.
- What amount should Cucumber report as its income from investment in Super Company for the year ended December 31, 2018?
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