On December 31, 2020, Luffy Company's investment in subsidiary account showed a balance of P400,000. This account is related to an acquisition entered at the beginning of 2020 of which Luffy acquired 80% controlling interest of an acquiree for a total consideration of P400,000, including acquisition related costs amounting to P50,000. Total comprehensive income of the acquiree at year-end amounted P1,000,000, and dividend received from the acquiree amounted to P700,000. The fair value of the investment at year-end is P600,000 and the estimated cost to sell amounted to P150,000. What should be the balance of the investment as at December 31, 2020 under cost model? a.400.000 b 500,000 с 450.000 d. 600,000

On December 31, 2020, Luffy Company's investment in subsidiary account showed a balance of P400,000. This account is related to an acquisition entered at the beginning of 2020 of which Luffy acquired 80% controlling interest of an acquiree for a total consideration of P400,000, including acquisition related costs amounting to P50,000. Total comprehensive income of the acquiree at year-end amounted P1,000,000, and dividend received from the acquiree amounted to P700,000. The fair value of the investment at year-end is P600,000 and the estimated cost to sell amounted to P150,000. What should be the balance of the investment as at December 31, 2020 under cost model? a.400.000 b 500,000 с 450.000 d. 600,000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

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