Business Combination (EQUITY METHOD) 7, On January 3, 2020, Draco Malfoy Company acquired 80% of Ron Weasley Company'soutstanding shares. On that date, the carrying amounts of Ron Weasley's assets andliabilities approximated their fair values. Non-controlling interest was measured using theproportionate share method.During 2020, Ron Weasley paid P5,000 cash dividends to its shareholders. SummarizedStatement of Financial Position for the two companies follows: Draco MalfoyCompany (BV) Ron Weasley Company12/31/202012/31/2020 01/01/2020Investment in Ron Weasley (equitymethod)Other assets132,000138,000270,000115,000115,000100,000100,000TotalOrdinary shareShare premiumRetained eamings50,00080,250139,750270,00020,00044,00051,00020,00044,00036,000100,000Total115,000What amount should Draco Malfoy report as carnings from subsidiary in its 2020 incomestatement?а. Р12,000b. P15,000c. P16,000d. P20,0008. How much is the acquisition cost of investment?a. P120,000b. P132,000c. P150,000d. P160,0009. How much is the goodwill on combination?а. Р20,000b. Р22,000с. Р32,000d. P40,00010. How much is the non-controlling interest in the net assets of Ron Weasley on December31, 2020?a. P20,000b. Р23,000с. Р26,000d. P32,000

Business combination is the merger of two or more than two companies into a single company or even…

What amount should Draco Malfoy report as earnings from subsidiary in its 2020 income statement? а. Р12,000 b. P15,000 c. P16,000 d. P20,000 8. How much is the acquisition cost of investment? a. P120,000 b. P132,000 c. P150,000 d. P160,000 9. How much is the goodwill on combination? а. Р20,000 b. Р22,000 с. Р32,000 d. P40,000 10. How much is the non-controlling interest in the net assets of Ron Weasley on December 31, 2020?

What amount should Draco Malfoy report as earnings from subsidiary in its 2020 income statement? а. Р12,000 b. P15,000 c. P16,000 d. P20,000 8. How much is the acquisition cost of investment? a. P120,000 b. P132,000 c. P150,000 d. P160,000 9. How much is the goodwill on combination? а. Р20,000 b. Р22,000 с. Р32,000 d. P40,000 10. How much is the non-controlling interest in the net assets of Ron Weasley on December 31, 2020?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 14RE

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