Question
On March 31, 2020, Anguirus Company purchased 120,000 ordinary shares of Godzilla Company for P1,700,000, representing 30% of Godzilla's outstanding shares and an underlying equity
On March 31, 2020, Anguirus Company purchased 120,000 ordinary shares of Godzilla Company for P1,700,000, representing 30% of Godzilla's outstanding shares and an underlying equity of P1,400,000 in Godzilla's net assets on January 2, 2020. The excess of the acquisition cost over the equity acquired cannot be attributed to any tangible asset. As a result of Anguirus' 30% ownership of Godzilla, Anguirus has the ability to exercise significant influence over Godzilla's financial and operating policies. On March 1, June 1, September 1 and December 1, all in the year 2020, Godzilla paid quarterly dividend of P0.50 per ordinary share on each of these dates. Godzilla's profit for the year ended December 31, 2020 was P1,200,000, that was earned evenly throughout the year. At December 31, 2020, each ordinary share of Godzilla Company was selling at P16.
- Assuming the excess of acquisition cost over the underlying equity acquired is attributable to a piece of equipment with a remaining life of 5 years on the date of investment acquisition, and depreciation on a straight line basis, what is the investment carrying amount at December 31, 2020?
- What is Anguirus' income from associates for the year 2020?
- What is the investment carrying amount at December 31, 2020?
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