On July 1, 2021, Mickaella Company, an SME, acquired 20% of the outstanding ordinary shares of another entity for P5,000,000. The book value of the acquired share was P4,000,000. The excess of
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- On July 1, 2021, Mickaella Company, an SME, acquired 20% of the outstanding ordinary shares of another entity for P5,000,000. The book value of the acquired share was P4,000,000. The excess of cost over book value was attributable to an identifiable intangible asset which was undervalued on the investee’s statement of financial position and which had a remaining useful life of 5 years. For the year ended December 31, 2021, the investee reported net income of P6,000,000 and paid cash dividends of P1,000,000 on its ordinary share capital and issued 10% share dividend on December 31, 2021. The entity elected to use the equity method in accounting for this investment. What is the carrying value of the investment in associate at December 31, 2021?On July 1, 2020, GREEN Company acquired 20% of the outstanding ordinary shares of another entity for ₱5,000,000. The carrying amount of the acquired shares was ₱4,000,000. The excess of cost over the carrying amount was attributable to an identifiable intangible asset which was undervalued on the investee’s statement of financial position and which had a remaining useful life of 5 years. The investee reported net income of ₱6,000,000 for 2020 and paid cash dividends of ₱1,000,000 on ordinary shares and issued 10% stock dividend on December 31, 2020. What is the carrying amount of the investment in associate on December 31, 2020? A. ₱ 5,900,000 B. ₱ 5,400,000 C. ₱ 5,800,000 D. ₱ 5,300,000On July 1, 2020, GREEN Company acquired 20% of the outstanding ordinary shares of another entity for ₱5,000,000. The carrying amount of the acquired shares was ₱4,000,000. The excess of cost over the carrying amount was attributable to an identifiable intangible asset which was undervalued on the investee’s statement of financial position and which had a remaining useful life of 5 years. The investee reported net income of ₱6,000,000 for 2020 and paid cash dividends of ₱1,000,000 on ordinary shares and issued 10% stock dividend on December 31, 2020. What is the carrying amount of the investment in associate on December 31, 2020? * ₱ 5,800,000 ₱ 5,900,000 ₱ 5,400,000 ₱ 5,300,000
- On July 1, 2020, GREEN Company acquired 20% of the outstanding ordinary shares of another entity for ₱5,000,000. The carrying amount of the acquired shares was ₱4,000,000. The excess of cost over the carrying amount was attributable to an identifiable intangible asset which was undervalued on the investee’s statement of financial position and which had a remaining useful life of 5 years. The investee reported net income of ₱6,000,000 for 2020 and paid cash dividends of ₱1,000,000 on ordinary shares and issued 10% stock dividend on December 31, 2020. What is the carrying amount of the investment in associate on December 31, 2020?On July 1, 2020, GREEN Company acquired 20% of the outstanding ordinary shares of another entity for ₱5,000,000. The carrying amount of the acquired shares was ₱4,000,000. The excess of cost over the carrying amount was attributable to an identifiable intangible asset which was undervalued on the investee’s statement of financial position and which had a remaining useful life of 5 years. The investee reported net income of ₱6,000,000 for 2020 and paid cash dividends of ₱1,000,000 on ordinary shares and issued 10% stock dividend on December 31, 2020. What amount of investment income should be reported by GREEN for 2020? A. ₱ 1,000,000 B. ₱ 500,000 C. ₱ 300,000 D. ₱ 800,000On July 1, 2020, GREEN Company acquired 20% of the outstanding ordinary shares of another entity for ₱5,000,000. The carrying amount of the acquired shares was ₱4,000,000. The excess of cost over the carrying amount was attributable to an identifiable intangible asset which was undervalued on the investee’s statement of financial position and which had a remaining useful life of 5 years. The investee reported net income of ₱6,000,000 for 2020 and paid cash dividends of ₱1,000,000 on ordinary shares and issued 10% stock dividend on December 31, 2020. 1. What amount of investment income should be reported by GREEN for 2020? a. ₱ 500,000 b. ₱ 800,000 c. ₱ 1,000,000 d. ₱ 300,000 2. What is the carrying amount of the investment in associate on December 31, 2020? a. ₱ 5,800,000 b. ₱ 5,400,000 c. ₱ 5,300,000 d. ₱ 5,900,000 The answer for #2 is letter C (5,300,000) but I am unsure of the solution for this. May I ask for your help with these…
- On January 2, 2021, E Company acquired 20% of the outstanding ordinary shares of T Company for P700,000.00. This investment gave E Company the ability to exercise significant influence over T Company. The book value of the acquired shares was P600,000.00. The excess of cost over book value was attributed to a depreciable asset which was undervalued on T Company's balance sheet and which had ten years useful life remaining. For the year ended December 31, 2021, T Company reported net income after tax of P180,000.00 and paid cash dividends of P60,000.00 on its ordinary. Income tax rate is 32%. How much is the carrying value of E Company's investment in T Company at December 31, 2021? P678,000.00 P690,000.00 P714,000.00 P717,200.00On January 3, 2020, Novak Limited purchased 3,500 (35%) of the common shares of Sonja Corp. for $468,900. The following information is provided about the identifiable assets and liabilities of Sonja at the date of acquisition: Carrying Amount Fair Value Assets not subject to depreciation $516,000 $516,000 Assets subject to depreciation (10 years remaining) 806,000 866,000 Total identifiable assets 1,322,000 1,382,000 Liabilities 108,000 108,000 During 2020, Sonja reported the following information on its statement of comprehensive income: Income before discontinued operations $208,000 Discontinued operations (net of tax) (71,900) Net income and comprehensive income 136,100 Dividends declared and paid by Sonja November 15, 2020 124,000 Assume that the 35% interest is enough to make Sonja an associate of Novak, and that Novak is required to apply IFRS for its financial reporting. The fair…On 1 July 2022, Dean Ltd acquired the remaining 80% of the issued shares of Lewis Ltd for shares in Dean Ltd with a fair value of $1 000 000. At that date, the financial statements of Lewis Ltd showed the following information. All the assets and liabilities of Lewis Ltd were recorded at amounts equal to their fair values at the acquisition date, except some equipment recorded at $50 000 below its fair value with a related accumulated depreciation of $80 000. Assume the equipment has not been revalued in the subsidiaries accounts. Also, Dean Ltd identified at acquisition date a contingent liability related to a lawsuit where Lewis Ltd was sued by a former supplier and attached a fair value of $40 000 to that liability. The previous held interest by Dean Ltd in Lewis Ltd (ie 20% of the issued shares) was recognised by in Dean Ltd.’s accounts at the fair value at acquisition date of $250 000. Dean Ltd incurred $15 000 in acquisition related costs including $10 000 in share issue costs.…
- On January 1, 2023, Novak Corporation, a public company following IFRS, acquired 15,900 of the 53,000 outstanding common shares of Noah Corp. for $22 per share. Noah's statement of financial position reported the following information at the date of the acquisition: Assets not subject to depreciation $289,800 Assets subject to depreciation 860,100 Liabilities 150,100 Additional information: 1. On the acquisition date, the fair value is the same as the carrying amount for the assets that are not subject to depreciation and for the liabilities. 2. 3. 4. On the acquisition date, the fair value of the assets that are subject to depreciation is $964,100. These assets had a remaining useful life of eight years at that time. Noah reported 2023 net income of $104,000 and paid dividends of $5,000 in December 2023. Noah's shares are not actively traded on the stock exchange, but Novak has determined that they have a fair value of $21 per share on December 31, 2023. (a) Your answer is partially…On January 1, 2023, Flounder Corporation, a public company following IFRS, acquired 17,400 of the 58,000 outstanding common shares of Noah Corp. for $27 per share. Noah's statement of financial position reported the following information at the date of the acquisition: Assets not subject to depreciation $287,800 Assets subject to depreciation 863,600 Liabilities 148,600 Additional information: 1. On the acquisition date, the fair value is the same as the carrying amount for the assets that are not subject to depreciation and for the liabilities. 2. 3. 4. On the acquisition date, the fair value of the assets that are subject to depreciation is $957,600. These assets had a remaining useful life of eight years at that time. Noah reported 2023 net income of $94,000 and paid dividends of $4,500 in December 2023. Noah's shares are not actively traded on the stock exchange, but Flounder has determined that they have a fair value of $25 per share on December 31, 2023. (a) Prepare the journal…. PKT Ltd acquired 80% of the ordinary shares of CF Ltd. The net assets were fairly valued on 1January 2021 except for machinery that were undervalued by R550 000. The machine was purchased on 1January 2020 for R1 250 000 and had a useful life of 5 years. No adjustments at acquisition for the abovematter. Prepare the journal entries (with narrations) for the year ended 31 December 2022. Assume a taxrate of 30%