Johnson paid $1·2 million for a 30% investment in Treem’s equity shares on 1 August 2014.

Treem’s profit after tax for the year ended 31 March 2015 was $750,000. On 31 March 2015, Treem had $300,000goods in its inventory which it had bought from Johnson in March 2015. These had been sold by Johnson at amark-up on cost of 20%. Treem has not paid any dividends.

On the assumption that Treem is an associate of Johnson, what would be the carrying amount of the investment in Treem in the consolidated statement of financial position of Johnson as at 31 March 2015?

• $1,335,000
• $1,332,000
• $1,300,000
• $1,410,000

Answer rating: 100% (QA)

The answer is option A which is 1335000 cost of investment 1200000 Share of profit profit ... View the full answer