Problem 18-2 (IFRS) Glorious Company acquired 40% interest in an associate, Alta Company, for P5,000,000 on January 1, 2022. At the acquisition date, there were no differences between. fair value and carrying amount of identifiable assets and liabilities. ; Alta Company reported net income of P2,000,000 for 2022 and P3,000,000 for 2023. On December 31, 2022 and 2023, Alta Company paid cash dividend of P800,000 and, P1,000,000, respectively. On January 1, 2022, Alta Company sold an equipment costing P500,000 to Glorious Company for P800,000. Glorious Company applied a 10% straight line depreciation. On July 1, 2023, Alta Company sold an equipment for P900,000 to Glorious Company. The carrying amount of the equipment is P500,000 at the time of sale. The remaining life of the equipment is 5 years and Glorious Company used the straight line depreciation. On December 1, 2023, Alta Company sold an inventory to Glorious Company for P2,800,000. The inventory had a cost of P2,000,000 and was still on hand on December 31, 2023. : Required: “1. Determine the investor's share in the profit of the associate for 2022. 2. Determine the investor's share in the profit of the associate for 2023. 3. Prepare journal entries on the books of Glorious Company for 2022 and 2023 in relation to the investment in associate. 4. Determine the carrying amount of the investment in associate on December 31, 2023. 488 Scanned with CamScannerProblem 18-4 (IFRS) On January 1, 2022, Outlander Company acquired a 25% interest in an associate for P8,000,000.On this date, the carrying amounts of the investee's identifioable assets and liabilities equaled fair value. During 2022, Outlander Company sold inventory to the associate for P2,000,000. The inventory had a carrying amount of P1,600,000. The entity used the perpetual method. On December 31, 2022, the inventory was not sold by the associate. During 2023, the associate sold the inventory for P2,600,000. The investee reported the following net income and dividends paid for 2022 and 2023: 2022 i‘ 2023 Net income 4,000,000 7,000,000 Dividends paid 600,000 1,000,000 Required: 1. Prepare the journal entries for 2022 and 2023. 2. Compute the carrying amount of the investment on * December 31, 2022 and 2023. Problem 18-5 (AICPA Adapted) On January 1, 2022, Grant Company acquired 30% of East Company’s voting shares for P8,000,000. During 2022, East Company earned P5,000,000 and paid dividends of P2,000,000. East Company reported earnings of P6,000,000 for the 6 months ended June 30, 2023, and P8,000,000 for the year ended December 31, 2023. On July 1, 2023, Grant Company sold half of the investment in East Company for P6,000,000 cash resulting to loss of significant influence. East Company paid dividends of P2,500,000 on October 1, 2023. On July 1, 2023, the investment is measured at fair value through other comprehensive income. The fair value of the retained investment is P6,500,000 on July 1, 2023 and P5,900,000 on December 31, 2023. ‘i Required: Prepare journal entries for 2022 and 2023. 490 Scanned with CamScannerProblem 18-7 (IFRS) On January 1, 2022, Vision Company acquired a 10% interest in an investee for P3,000,000. The investment-was accounted for under the cost method. During 2022, the investee reported net income of P4,000,000 and paid cash dividend of P1,000,000. On January 1, 2023, Vision Company acquired a further 15% interest in the investee for P8,500,000. On such date, the carrying amount of the net assets of the investee was P36, 000,000 and the fair value of the 10% existing interest was 3,500,000. The fair value of the net assets of the investee was equal to carrying amount. The investee reported net income of P8,000,000 for 2023 and paid dividend of P6,000,000 on December 31, 2023. Required: 1. Prepare journal entries for 2022 and 208. 2. Compute the total income of the inv 3. Compute the carrying amount of ct ee on December 31, 2023. ’ Scanned with CamScanner