On January 1, 2013, Babe Company acquired a long term investment for P7,000,000, a 40% interest in Honey Company when the fair value of Honey’s net assets was P17,500,000. Honey Company reported the following net losses: 2013 5,000,000 2014 7,000,000 2015 8,000,000 2016 4,000,000 On January 1, 2015, Babe Company made cash advances of P2,000,000 to Honey Company. What amount should be reported in 2016 as loss on investment?
On January 1, 2013, Babe Company acquired a long term investment for P7,000,000, a 40% interest in Honey Company when the fair value of Honey’s net assets was P17,500,000. Honey Company reported the following net losses: 2013 5,000,000 2014 7,000,000 2015 8,000,000 2016 4,000,000 On January 1, 2015, Babe Company made cash advances of P2,000,000 to Honey Company. What amount should be reported in 2016 as loss on investment?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2013, Babe Company acquired a long term investment for
P7,000,000, a 40% interest in Honey Company when the fair value of Honey’s net assets was P17,500,000. Honey Company reported the following net losses:
2013 5,000,000
2014 7,000,000
2015 8,000,000
2016 4,000,000
On January 1, 2015, Babe Company made cash advances of P2,000,000 to
Honey Company. What amount should be reported in 2016 as loss on investment?
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