On January 1, 2019, Ailyssa Company acquired 30%of the voting share capital of Ruby Company for P5,000,000 which was equal to the book value of interest acquired. The investee reported net profit of P4,000,000 for 2019 and P6,000,000 for 2020 but paid no dividends during the two-year period. On July 1, 2020, Ailyssa sold one-half of the investment for net proceeds of P4,480,000. The fair value of the-remaining investment was P4,500,000 on July 1, 2020 and P4,850,000 on December 31, 2020. The remaining investment is to be held at fair value through other comprehensive income. How much is the unrealized gain on equity investment reported in the 2020 other comprehensive income? a. P2,230,000 b. P1,880,000 c. P950,000 d. P350,000
On January 1, 2019, Ailyssa Company acquired 30%of the voting share capital of Ruby Company for P5,000,000 which was equal to the book value of interest acquired. The investee reported net profit of P4,000,000 for 2019 and P6,000,000 for 2020 but paid no dividends during the two-year period. On July 1, 2020, Ailyssa sold one-half of the investment for net proceeds of P4,480,000. The fair value of the-remaining investment was P4,500,000 on July 1, 2020 and P4,850,000 on December 31, 2020. The remaining investment is to be held at fair value through other comprehensive income. How much is the unrealized gain on equity investment reported in the 2020 other comprehensive income? a. P2,230,000 b. P1,880,000 c. P950,000 d. P350,000
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 24E
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On January 1, 2019, Ailyssa Company acquired 30%of the voting share capital of Ruby Company for P5,000,000 which was equal to the book value of interest acquired. The investee reported net profit of P4,000,000 for 2019 and P6,000,000 for 2020 but paid no dividends during the two-year period. On July 1, 2020, Ailyssa sold one-half of the investment for net proceeds of P4,480,000. The fair value of the-remaining investment was P4,500,000 on July 1, 2020 and P4,850,000 on December 31, 2020. The remaining investment is to be held at fair value through other comprehensive income.
How much is the unrealized gain on equity investment reported in the 2020 other comprehensive income?
How much is the unrealized gain on equity investment reported in the 2020 other comprehensive income?
a. P2,230,000
b. P1,880,000
c. P950,000
d. P350,000
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