Alpha Company acquired 20,000 shares of Beta Company on January 1, 2021 at P120 per...
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Accounting
Alpha Company acquired 20,000 shares of Beta Company on January 1, 2021 at P120 per share. Beta Company had 80,000 shares outstanding with a carrying amount of P8,000,000.
The difference between the carrying amount and fair value of Beta Company on January 1, 2021 is attributable to a broadcast license intangible asset.
Alpha Company has a 20-year straight line amortization policy for the broadcast license.
Beta Company recorded earnings of P3,600,000 and P3,900,000 for 2021 and 2022, respectively, and paid per-share dividend of P16 in 2021 and P20 in 2022.
Required:
1. Compute the investment income for 2021.
2. Compute the investment income for 2022.
3. Determine the carrying amount of the investment in associate on December 31, 2022.
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