Chevy Company owns 50% of another entitys preferred share capital and 40% of its ordinary share capital.
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Question:
Chevy Company owns 50% of another entity’s preferred share capital and 40% of its ordinary share capital. The investee’s share capital outstanding on December 31, 2021, includes P5,000,000 of 10% cumulative preference share capital and P10,000,000 of ordinary share capital. The investee reported
a net income of P6,000,000 for 2021. No dividend was declared for both preference and ordinary shares in 2021.
Assume that the company is an SME and the company elected to use the fair value model, what amount should Chevy Company report as investment income for 2021?
Related Book For
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson, Wayne Thomas
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