On January $1,2021,$ Flesh$-$n$-$Bone Corporation acquired $30\%$ of Doug Corporation's $200,000$ outstanding

shares at P$50$ per share. Doug's net assets had a book value on the same date at P$8,200,000.$ On the

acquisition date, the following assets were deemed understated:

Building having a remaining useful life of $20$ years was understated by P$1,500,000.$

Equipment having a remaining life of $10$ years was understated by P$500,000.$ Doug reported net income

for the year at $\mathrm{????}2,000,000$ and paid cash dividends of $\mathrm{????}10$ per share by December $31.$

How much investment income should be reported in Flesh$-$n$-$Bone Corporation's profit or loss for

$2021?$

a$.600,000$

b$.577,500$

c$.622,500$

d$.562,500$

What is the carrying amount of the investment in Doug as of December $31,2021?$

a$.3,562,500$

b$.3,000,000$

c$.3,622,500$

d$.3,022,500$

Answer rating: 100% (QA)

FleshnBone Corporation Investment in Doug Corporation Scenario FleshnBone Corporation acquired 30 of ... View the full answer