On January 2, 2020, Tuao Company purchased 10% of Abulug Company's outstanding ordinary shares for P20,000,000. Tua is the largest single shareholder in Abulug and this gives Tuao the power to participate in the financial and operating policy decisions of the Abulug but is not control or joint control over those policies. Abulug reported profit of P10,000,000 and paid dividend of P4,000,000.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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On January 2, 2020, Tuao Company purchased 10% of Abulug Company's outstanding ordinary shares for P20,000,000. Tuac
is the largest single shareholder in Abulug and this gives Tuao the power to participate in the financial and operating policy
decisions of the Abulug but is not control or joint control over those policies. Abulug reported profit of P10,000,000 and
paid dividend of P4,000,000.
What should be the balance in Tuao's investment in Abulug Company at the end of 2020?
P21,000,000
P21,400,000
P20,600,000
P20,000,000
Transcribed Image Text:On January 2, 2020, Tuao Company purchased 10% of Abulug Company's outstanding ordinary shares for P20,000,000. Tuac is the largest single shareholder in Abulug and this gives Tuao the power to participate in the financial and operating policy decisions of the Abulug but is not control or joint control over those policies. Abulug reported profit of P10,000,000 and paid dividend of P4,000,000. What should be the balance in Tuao's investment in Abulug Company at the end of 2020? P21,000,000 P21,400,000 P20,600,000 P20,000,000
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