At the beginning of 2021, Nobela Corporation bought 15% ownership stake in Joseph Corporation for P200,000 and classified it as FVPL investment. Joseph's net income for the years ended December 31, 2021, and 2022, were P500,000 and P1,000,000, respectively. At the end of 2022, Joseph declared a dividend of P300,000. No dividends were declared in 2021. On December 31, 2022, the fair value of the stock owned by Nobela had increased to P500,000. How much is the total income from this investment that will be reflected in the 2022 income statement?

At the beginning of 2021, Nobela Corporation bought 15% ownership stake in Joseph Corporation for P200,000 and classified it as FVPL investment. Joseph's net income for the years ended December 31, 2021, and 2022, were P500,000 and P1,000,000, respectively. At the end of 2022, Joseph declared a dividend of P300,000. No dividends were declared in 2021. On December 31, 2022, the fair value of the stock owned by Nobela had increased to P500,000. How much is the total income from this investment that will be reflected in the 2022 income statement?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 11MCQ

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