On January 1, 20X4, ABC Company acquired 100,000 ordinary shares of XYZ Company for P5,000,000. At the time of purchase, XYZ Company had 500,000 outstanding shares with a fair value and book value of P25 million. For the year ended December 31, 20X4, the following events took place: • XYZ reported net income of P1,800,000 for the calendar year 20X4. • ABC received from XYZ a dividend of P2.50 per ordinary share. • XYZ recognized unrealized gains of P600,000 on its financial assets at fair value thru other comprehensive income. • The market value of XYZ Company’s shares had temporarily decreased to P45 per share. ABC does have significant influence over XYZ. What is the carrying amount of the investment on December 31, 20X4? a. P4,500,000 b. P5,000,000 c. P5,230,000 d. P5,110,000
On January 1, 20X4, ABC Company acquired 100,000 ordinary shares of XYZ Company for P5,000,000. At the time of purchase, XYZ Company had 500,000 outstanding shares with a fair value and book value of P25 million. For the year ended December 31, 20X4, the following events took place:
• XYZ reported net income of P1,800,000 for the calendar year 20X4.
• ABC received from XYZ a dividend of P2.50 per ordinary share.
• XYZ recognized unrealized gains of P600,000 on its financial assets at fair value thru other comprehensive income.
• The market value of XYZ Company’s shares had temporarily decreased to P45 per share. ABC does have significant influence over XYZ. What is the carrying amount of the investment on December 31, 20X4?
a. P4,500,000
b. P5,000,000
c. P5,230,000
d. P5,110,000
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