Investment in Associate

Grant, Inc. acquired 30% of South Co.'s voting stock for P200,000 on January 2, 2019. Grant's 30% interest in South gave Grant the ability to exercise significant influence over South's operating and financial policies. During 2019, South earned P80,000 and paid dividends of P50,000. South reported earnings of P100,000 for the six months ended June 30, 2020, and P200,000 for the year ended December 31, 2020. On July 1, 2020, Grant sold half of its stock in South for P150,000 cash. South paid dividends of P60,000 on October 1, 2020. Before income taxes, what amount should Grant include in its 2019 income statement as a result of the investment?

a. P15,000

b. P24,000

c. P50,000

d. P80,000

ANSWER THE QUESTION ABOVE AND PREPARE JOURNAL ENTRIES FOR

a. January 2, 2019

b. December 31, 2019

c. June 30, 2020

d. July 1, 2020

e. October 1, 2020

f. December 31, 2020 assuming the fair value is P150/ share. Assuming further that the investments are measured at

i. FVTPL

ii. FVTOCI

Compute for the investment balance on

a. January 1, 2019

b. December 31, 2019

c. June 30, 2020

d. July 1, 2020

e. December 31, 2020