Reference no: EM133160503

Question 1 - Sixty company owned 30% of another entity for a couple of years now. The carrying amount of the investment at the end of prior accounting period, 2019, was P355,000. During 2020, the associate sold an item of inventory to Sixty with a selling price of P50,000 and costing the associate about P15,000. This inventory remain unsold at the end of the year. The net income of the associate for the year 2020 is P800,000 and Sixty received P22,000 cash dividend. How much is the investment in associate account to be presented in Sixty's statement of financial position as of December 31, 2020?

Question 2 - On January 1, 2019, Seventh company acquired 25,000 share for P10 per share thereby giving 10% ownership over of the outstanding ordinary shares of Seventeen corporation. The shares were classified as FVPL. As of the end of 2019, the shares are traded at P15 per share. The investee reported a net income of P100,000 and cash dividends of P20,000 were declared and paid. On July 1, 2020. Seventh acquired 37,500 additional shares of seventeen corporation at P18 per share. As of the end of 2020, the shares are traded at P22 per share. The investee reported a net income of P170.000 which was earned evenly during the year 2020. Cash dividends of P22 per share were declared on January 5, 2021. How much should be recognized as investment associate on July 1, 2020?