5. Sage, Inc. bought 40% of Adams Corp.'s outstanding common stock on January 2, 20x3 for P400.000. The carrying amount Adams' net assets at the purchase date totaled P900,000. Fair values and carrying amounts were the same for all items except for plant and inventory, for which fair values exceeded their carrying amounts by P90,000 and P10,000, respectively. The plant has an eighteen-year life. The inventory was sold during 20x3. During 20x3, Adams reported net income of P120,000 and paid a P20,000 cash dividend. What amount should Sage report in its income statement from its investment in Adams for the year ended December 31, 20x3? of a. 48,000 AICPA) b. 42,000 с. 36,000 d. 32,000

5. Sage, Inc. bought 40% of Adams Corp.'s outstanding common stock on January 2, 20x3 for P400.000. The carrying amount Adams' net assets at the purchase date totaled P900,000. Fair values and carrying amounts were the same for all items except for plant and inventory, for which fair values exceeded their carrying amounts by P90,000 and P10,000, respectively. The plant has an eighteen-year life. The inventory was sold during 20x3. During 20x3, Adams reported net income of P120,000 and paid a P20,000 cash dividend. What amount should Sage report in its income statement from its investment in Adams for the year ended December 31, 20x3? of a. 48,000 AICPA) b. 42,000 с. 36,000 d. 32,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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