LaFevor Co. acquired 70% of the common stock of Dean Corp. on August 1, 2022. For 2022, Dean reported revenues of $960,000 and expenses of $780,000, all reflected evenly throughout the year. The annual amount of amortization related to this acquisition was $21,000. What is the effect of including Dean in consolidated net income for 2022? Multiple Choice $75,000. $66,250. $159,000. $126,000. $8,750.
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- Denber Co. acquired 60% of the common stock of Kailey Corp. on September 30, 2019. For 2019, Kailey reported revenues of $820,000 and expenses of $610,000, (excluding amortization related to the acquisition) all reflected evenly throughout the year, The annual amount of amortization related to this acquisition was $15,000. What is the effect of including Kailey in consolidated net income for 2019? A. 31,250 B. 33,000 C. 48,750 D. 39,350On January 1, 2021, PCO purchased 70% ownership of SCO which resulted to a gainon acquisition of P100,000. Net assets of SCO were fairly valued except for inventorywhich was understated by P1,500,000. A third of these inventories remained unsoldas of the end of the calendar year.The operations of the two companies for 2021 are as follows:PCO SCOSales P3,100,000 P2,600,000(COGS) (1,300,000) (1,250,000)Gross profit 1,800,000 1,350,000(OPEX) (200,000) (150,000)1,550,0003,550,0001,850,0003,250,000Other income 0 200,000(Other expenses) (120,000) 0Net income P1,480,000 P 400,000In the consolidated statement of comprehensive income for the year endedDecember 31, 2021, how much is the cost of goods sold? A. 1,550,000B. 3,550,000C. 1,850,000D. 3,250,000 based on the information above, In the consolidated statement of comprehensiveincome for the year ended December 31, 2021, how much is the consolidated netincome attributable to the controlling interest? 1,830,0001,980,0001,760,0001,860,000How much is the consolidated profit? On January 2, 2021, ABC Co. acquired 60% interest in DDD Corp. for P360,000. Information on DDD Corp's financial position on acquisition date follows: > The identifiable assets and liabilities approximated their fair values except for inventories with carrying amount of P144,000 and fair value of P96,000 and building with carrying value amount of P240,000 and fair value of P250,000. The building has a remaining useful life of 8 years. > DDD Corp's retained earnings was P48,000 > Non-controlling interest is measured at a fair value of P240,000 A summary of the individual financial information of the entities on December 31, 2021 is shown below: DDD Corp. 550,000 АВС Со. Total Assets 1,550,000 Total Liabilities 132,000 34,000 Share Capital Retained Earnings 300,000 1,200,000 118,000 316,000 Sales Cost of Sales 350,000 700,000 80,000 200,000 Other Operating expenses 200,000 400,000
- On January 1, 2020, Jumper Co. acquired all of the common stock of Cable Corp. for $540,000. Annual amortization associated with the acquisition amounted to $1,800. During 2020, Cable recognized net income of $54,000 and paid dividends of $24,000. Cable's net income and dividends for 2021 were $86,000 and $24,000, respectively. Required: Assuming that Jumper decided to use the partial equity method, prepare a schedule to show the balance in the investment account at the end of 2021.Anthem Co. acquired 60% of the outstanding shares of Bethel Co. onJanuary 2, 2021. Anthem Co. acquired it at book value which is the sameas its fair value at the date of acquisition. Income Statement of AnthemCo. and Bethel Co. for 2022 are as follows:Anthem Co.Net Sales P875,000Cost of Sales 525,000Gross Profit 350,000Operating Expenses 105,000Operating Income 245,000Dividend Income 56,000Net Income P301,000Bethel Co. made sales to Anthem Co. of P112,000 in 2021 andP168,000 in 2022.Anthem Co. reported inventory on December 31, 2021 amounting toP70,000 of which 20% comes from Bethel Co. and inventory onDecember 31, 2022 amounting to P84,000 of which 30% comes fromBethel Co.Anthem Co. made sales to Bethel Co. of P273,000 in 2021 andP338,000 in 2022.Bethel reported inventory coming from Anthem Co. as of December31, 2021 and December 31, 2022 in the amount of P54,600 andP152,100, respectively.Anthem Co. uses 30% mark-up on cost and Bethel Co. uses 25%mark-up on cost for their selling…A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
- On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. Theconsideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shareswith a market price of P45 per share.The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for thefollowing:• Merchandise inventory’s fair value is lower than the book balance by 150,000.• Equipment-A, with 2 years remaining useful life, costing P300,000 is understated byP50,000.• Land with a fair value of P500,000 is recognized in the books amounting to P350,000.The following events happened to Luna Corp.• Equipment-A was sold in June 30, 2023 for P320,000.• 60% of merchandise inventory were sold in 2022.• There is no movement as to the ordinary shares of Luna Corp during the year.The unadjusted trial balance as of December 31, 2022 were as follows:Lucas Company Luna CorpCash 2,240,000 1,800,000Trade Receivables 1,000,000 960,000Merchandise Inventory 2,320,000…On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. Theconsideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shareswith a market price of P45 per share.The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for thefollowing:• Merchandise inventory’s fair value is lower than the book balance by 150,000.• Equipment-A, with 2 years remaining useful life, costing P300,000 is understated byP50,000.• Land with a fair value of P500,000 is recognized in the books amounting to P350,000.The following events happened to Luna Corp.• Equipment-A was sold in June 30, 2023 for P320,000.• 60% of merchandise inventory were sold in 2022.• There is no movement as to the ordinary shares of Luna Corp during the year.The unadjusted trial balance as of December 31, 2022 were as follows:Lucas Company Luna CorpCash 2,240,000 1,800,000Trade Receivables 1,000,000 960,000Merchandise Inventory 2,320,000…A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
- A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…On January 1, 2021, PCO purchased 70% ownership of SCO which resulted to a gain on acquisition of P100,000. Net assets of SCO were fairly valued except for inventory which was understated by P1,500,000. A third of these inventories remained unsold as of the end of the calendar year. The operations of the two companies for 2021 are as follows: In the consolidated statement of comprehensive income for the year ended December 31, 2021, how much is the cost of goods sold? a. 1,550,000 b. 1,850,000 c. 3,550,000 d. 3,250,000