On January 1, 2018, BLEED Inc. acquired 10% interest in an investee for P3,000,000, The investment was accordingly classified as trading and measured at fair value through profit or loss. During the year, the investee had income of P1.800,000 and paid dividends of P600,000 to its shareholders. The fair value of the investment at year-end is P4,000,000. On January 1, 2019, Bleed acquired an additional 30% interest in the investee for P7,500,000. The increased ownership gave Bleed the power to participate in the investee's financial and operating policy decisions. Accordingly, the investment was now accounted for using the equity method. The investee had the following data for the next three years: 2019 P 2,000,000 s00,000 9,400,000 2020 P3,000,000 1,000,000 10,900,000 2021 P4,000,000 2,000,000 Net income Dividends paid Fair value of investment at year-end 13,000,000 How much should Bleed recognize as income from this investment for the year 2018?

On January 1, 2018, BLEED Inc. acquired 10% interest in an investee for P3,000,000, The investment was accordingly classified as trading and measured at fair value through profit or loss. During the year, the investee had income of P1.800,000 and paid dividends of P600,000 to its shareholders. The fair value of the investment at year-end is P4,000,000. On January 1, 2019, Bleed acquired an additional 30% interest in the investee for P7,500,000. The increased ownership gave Bleed the power to participate in the investee's financial and operating policy decisions. Accordingly, the investment was now accounted for using the equity method. The investee had the following data for the next three years: 2019 P 2,000,000 s00,000 9,400,000 2020 P3,000,000 1,000,000 10,900,000 2021 P4,000,000 2,000,000 Net income Dividends paid Fair value of investment at year-end 13,000,000 How much should Bleed recognize as income from this investment for the year 2018?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

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