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  3. problem 3: on january 1, 2020, thunder company acq

PROBLEM 3: On January 1, 2020, THUNDER Company acquired a 10% interest in an investee...

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PROBLEM 3: On January 1, 2020, THUNDER Company acquired a 10% interest in an investee for P3,000,000. The investment was accounted for using the cost method. On January 1, 2021, the entity acquired further a 15% interest in the investee for P6,450,000. On such date, the carrying amount of the net assets of the investee was P36,000,000 and the fair value of the 10% interest is $4,200,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value exceeds carrying amount by $4,000,000. The equipment has a remaining life of 5 years. The investee reported net income of $7,000,000 for 2020 and paid dividends of P3,500,000. REQUIREMENTS: 11. How much income is to be recognized with regards to the investment on 2020? 12. What is the gain on remeasurement to equity to be recognized for 2021? 13. What is the goodwill arising from the acquisition on January 1, 2021? 14. How much is the investment income on 2021? 15. What is the carrying amount of the investment in associate on December 31, 2021? PROBLEM 3: On January 1, 2020, THUNDER Company acquired a 10% interest in an investee for P3,000,000. The investment was accounted for using the cost method. On January 1, 2021, the entity acquired further a 15% interest in the investee for P6,450,000. On such date, the carrying amount of the net assets of the investee was P36,000,000 and the fair value of the 10% interest is $4,200,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value exceeds carrying amount by $4,000,000. The equipment has a remaining life of 5 years. The investee reported net income of $7,000,000 for 2020 and paid dividends of P3,500,000. REQUIREMENTS: 11. How much income is to be recognized with regards to the investment on 2020? 12. What is the gain on remeasurement to equity to be recognized for 2021? 13. What is the goodwill arising from the acquisition on January 1, 2021? 14. How much is the investment income on 2021? 15. What is the carrying amount of the investment in associate on December 31, 2021

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