Question
On June 1, 2019, BERRY acquired a 10% interest in an investee for 2,400,000. The investment was accounted for using the cost method. On January
On June 1, 2019, BERRY acquired a 10% interest in an investee for 2,400,000. The investment was accounted for using the cost method. On January 1, 2020, BERRY acquired a further 15% interest in the investee for 5,400,000. On such date, the carrying amount of the net assets of the investee was 28,800,000 and the fair value of the 10% interest was 3,600,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value exceeds carrying amount by 3,200,000. The equipment has a remaining life of 5 years. The investee reported net income of 6,400,000 for 2020 and paid dividend of 4,000,000 on December 31, 2020. What is the carrying amount of the investment in associate on December 31, 2020?
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