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Use the following information for the next three questions: Kimm, Inc. acquired 30% of Carne Corp.'s voting stock on January 1, 2004 for P360,000. During
Use the following information for the next three questions: Kimm, Inc. acquired 30% of Carne Corp.'s voting stock on January 1, 2004 for P360,000. During 2004, Carne earned P150,000 and paid dividends of P90,000. Kimm's 30% interest in Came gives Kimm the ability to exercise significant influence over Carne's operating and financial policies. During 2005, Carne earned P180,000 and paid dividends of P60,000 on April 1 and P60,000 on October 1. On July 1, 2005, Kimm sold half of its stock in Carne for P237,000 cash. 6. What amount should Kimm include in its 2004 income statement as a result of the investment? a. P150,000. b. P90,000 C. P45,000 d. P27,000 7. What should be the gain on sale of this investment in Kimm's 2005 income statement? a. P57,000. b. P52,500. c. P43,500. d. P34,500
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