The following transactions pertain to PARANGAWAMONA Corporation: • Purchased 15,000 shares of the P100 par value ordinary shares of MAAWAKANA Corporation for P1,850,000 representing 25% interest on January 1, 2018. The net assets of MAAWAKANA are fairly stated at P8,200,000. It is the company's policy to account any excess to the undervaluation of land. • MAAWAKANA reported net income of P820,100 for 2018 and a loss of P529,540 for 2019. • MAAWAKANA issued 15% share dividend for 2018 and paid cash dividend of P375,000 on the ordinary shares on 2019 • On January 5, 2020, sold 30% of its MAAWAKANA shares at P175 per share.
The following transactions pertain to PARANGAWAMONA Corporation: • Purchased 15,000 shares of the P100 par value ordinary shares of MAAWAKANA Corporation for P1,850,000 representing 25% interest on January 1, 2018. The net assets of MAAWAKANA are fairly stated at P8,200,000. It is the company's policy to account any excess to the undervaluation of land. • MAAWAKANA reported net income of P820,100 for 2018 and a loss of P529,540 for 2019. • MAAWAKANA issued 15% share dividend for 2018 and paid cash dividend of P375,000 on the ordinary shares on 2019 • On January 5, 2020, sold 30% of its MAAWAKANA shares at P175 per share.
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity
Section: Chapter Questions
Problem 37RQSC
Related questions
Question
. Compute for the CARRYING VALUE of the investment as of December 31, 2019.
![The following transactions pertain to PARANGAWAMONA
Corporation:
• Purchased 15,000 shares of the P100 par value ordinary
shares of MAAWAKANA Corporation for P1,850,000
representing 25% interest on January 1, 2018. The net
assets of MAAWAKANA are fairly stated at P8,200,000. It
is the company's policy to account any excess to the
undervaluation of land.
• MAAWAKANA reported net income of P820,100 for 2018
and a loss of P529,540 for 2019.
• MAAWAKANA issued 15% share dividend for 2018 and
paid cash dividend of P375,000 on the ordinary shares on
2019
• On January 5, 2020, sold 30% of its MAAWAKANA shares
at P175 per share.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0c42f9d3-a9be-4729-bcd5-3c268935606f%2F6dbcca99-4c81-404b-aca1-48941626f168%2Fmcq2oik_processed.png&w=3840&q=75)
Transcribed Image Text:The following transactions pertain to PARANGAWAMONA
Corporation:
• Purchased 15,000 shares of the P100 par value ordinary
shares of MAAWAKANA Corporation for P1,850,000
representing 25% interest on January 1, 2018. The net
assets of MAAWAKANA are fairly stated at P8,200,000. It
is the company's policy to account any excess to the
undervaluation of land.
• MAAWAKANA reported net income of P820,100 for 2018
and a loss of P529,540 for 2019.
• MAAWAKANA issued 15% share dividend for 2018 and
paid cash dividend of P375,000 on the ordinary shares on
2019
• On January 5, 2020, sold 30% of its MAAWAKANA shares
at P175 per share.
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