Chapter 8
Separate Financial Statements
PROBLEM 1: MULTIPLE CHOICE - THEORY
1. D
2. A
3. A
4. D
5. D
PROBLEM 2: FOR CLASSROOM DISCUSSION
1. D
2. B
3. D
4. D
5. D
re is
s
s
o
sh u tud
Co are rce y
ur d v wa
se ia s
H
er
Solution:
➢ at cost = 400,000
➢ at fair value = 450,000
➢ using equity method = 400,000 + (500,000 x 10%) – (150,000 x 10%) =
435,000
PROBLEM 3: MULTIPLE CHOICE - COMPUTATIONAL
1. D
₱4,000,000
3. B
Solution:
Investment in associate (Alphabets, Co.)
– at Fair value on Dec. 31, 20x1
₱ 420,000
4. D
Solution:
Investment in subsidiary (XYZ, Inc.)
Dividend revenue (₱1,200,000 x 80%)
₱ 960,000
Th
2. A
Solution:
Investment in subsidiary (XYZ, Inc.) – at cost
1
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Investment in associate (Alphabets Co.)
Dividend revenue (₱800,000 x 20%)
Unrealized gain on change in fair value (₱420K – ₱400)
Transaction costs expensed immediately
Net investment income
₱
40,000
20,000
(
80,000)
₱ 100,000
Th
re is
s
s
o
sh u tud
Co are rce y
ur d v wa
se ia s
H
er
(960,000 + 100,000) = 1,060,000
2
This study source was downloaded by 100000795765419 from CourseHero.com on 08-31-2021
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