Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

  1. 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?
  2. What is Anguirus' income from associates for the year 2020?
  3. What is the investment carrying amount at December 31, 2020?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Financial Accounting

Authors: Fred Phillips, Shana Clor Proell, Robert Libby, Patricia Libby

7th Edition

1265440166, 978-1265440169

More Books

Students also viewed these Accounting questions

Question

Explain the Pascals Law ?

Answered: 1 week ago

Question

What are the objectives of performance appraisal ?

Answered: 1 week ago

Question

State the uses of job description.

Answered: 1 week ago

Question

6. How can a message directly influence the interpreter?

Answered: 1 week ago