Solution-What amount of investment revenue should be

What amount of investment revenue should be reported

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Reference no: EM133115075

Question - On January 4, 2020, Corona Corp. paid P1,400,000 for 40,000 ordinary shares of Veerus Company. The investment represents a 30% interest in the net assets of Veerus and gave Corona the ability to exercise significant influence of Veerus's operating and financial policy decisions. Corona received dividends of P3 per share on December 4, 2020, and Veerus reported net income of P750,000 for the year ended December 31, 2020. The market value of Veerus' ordinary share at December 31, 2020, was P32 per share. The book value of Veerus' net assets was P3,200,000 and:

The fair market value of Veerus' depreciable assets, with an average remaining useful life of 8 years, exceeded their book value by P320,000,

The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill.

Listed below are the requirements for this data set. Fill-up your answers in the next 3 questions.

What amount of the investment cost is attributable to goodwill?

What amount of investment revenue should be reported in Corona's income statement for the year ended December 31, 2020?

What is the carrying value of the investment in Veerus ordinary shares at December 31, 2020?

Reference no: EM133115075

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What amount of investment revenue should be reported

Reference no: EM133115075

Reference no: EM133115075

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