ONof consolidated shareholder's equity?a. P9,853,575b. P9,122,070c. P8,773,575d. P9,867,52519. On January 5, 2022, Purpose Corporation purchased 70% ofShowtime Company's P10 par ordinary shares for P900,000. On thisdate, the carrying amount of Showtime's net assets was P1,000,000.The fair.value of identifiable net assets and liabilities of Showtimewere the same as the carrying amount except for equipment, which is200,000 in excess of carrying amount.For the year ended December 31, 2022, Showtime had a net incomeof P150,000 and paid cash dividend of P63,000 to Purpose. Excessattributable to equipment is amortized over 10 years.In December 31, 2022 consolidated statements, the non-controllinginterest should be reported at:a. P397,714b. Р380,614P372,000с.d. P345,50020On January 2, 2022, Galatians Company acquired 80% investment in

Non-controlling interest (NCI), also known as minority interest, refers to the portion of equity…

Answered: 19. On January 5, 2022, Purpose…

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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Ee.104.
On January 1, 2020, HULK CORP. acquired 70% of outstanding ordinary shares of HALL INC. at a price of P210,000. On the same date, the net assets of HALL INC. were reported at P260,000. On January 1, 2020 HULK reported retained earnings of P2,000,000 while HALL reported retained earnings of P200,000. All of the assets and liabilities of HALL are fairly valued except machinery which is undervalued by P80,000 and in inventory which is overvalued by P10,000. The said machinery has a remaining useful life of four years while 40% of the said inventory remained unsold at the end of 2020. For the year ended December 31, 2020, HULK reported net income of P1,000000 and declared dividends of P150,000 in the separate financial statements while HALL reported net income of P150,000 and declared dividends of P20,000 in the separate financial statements. HULK accounted the investment in HALL using cost method in the separate financial statements. 3. What is the non-controlling interest in net assets…
#13 YOO-YOO Company purchased 200 of the 1000 outstanding shares of WEBUL Company's common stock for $710000 on January 2, 2021. In 2021, WEBUL Company declared dividends of $155000 and reported earnings for the year of $510000.If YOO-YOO Company used the fair value method of accounting for its investment in WEBUL Company, its Equity Investments (WEBUL) account on December 31, 2021, should be $812000. $710000. $679000. $781000.
B.On January 1, 2021, LASER LTD. acquired 70% of outstanding ordinary shares of JUSTICE INC. at a price of P210,000. On the same date, the net assets of JUSTICE INC. were reported at P260,000. On January 1, 2021, LASER LTD. reported retained earnings of P2,000,000 while JUSTICE INC. reported retained earnings of P200,000. All the assets and liabilities of JUSTICE INC. are fairly valued except machinery, which is undervalued by P80,000 and inventory which is overvalued by P10,000. The said machinery has remaining useful life of five years while 40% of the said inventory remained unsold at the end of 2021. For the year ended December 31, 2021, LASER LTD. reported net income of P1,000,000 and declared dividends of P200,000 in the separate financial statements while JUSTICE INC. reported net income of P150,000 and declared dividends of P20,000 in the separate financial statements. LASER LTD. accounted the investment in JUSTICE INC. using cost method in the separate financial statements.…
8 On January 1, 2021, Arneyow Company acquired 10% of the outstanding voting shares of Pee Yu Pi Incorporated for P900,000. These shares were designated as equity investments at fair value through other comprehensive income. On January 1, 2022, Arneyow gained the ability to exercise significant influence over financial and operating policies of Pee Yu Pi by acquiring additional 20% of the outstanding shares for P2,760,000. The two purchases were made at prices proportionate to the value assigned to Pee Yu Pi’s net assets, which is equal to their carrying amounts. For the years ended December 31, 2021 and 2022, Pee Yu Pi reported the following: 2021 2022 Dividends paid P2,000,000 P3,000,000 Profit for the year 6,000,000 6,500,000 The fair values of the investments on December 31, 2021 and 2022 were P1,380,000 and P5,160,000, respectively. The carrying value of the investment in associate at the end of 2022 is?
10. On January 2, 2021, X Co. acquired all the ordinary share of Y Co. for P2,060,000. On that date, Y Co. reported the following stockholders’ equity account balances: Ordinary share P800,000, Share premium P620,000, accumulated profits P300,000. The assets and liabilities of Y Co had book values that were approximately equal to its fair values, except building that was undervalued by P400,000, and equipment that was overvalued by P120,000. The building that was undervalued has an estimated life of 20 years and the equipment with 5 years useful life. Prior to acquisition, Y Co. has unimpaired goodwill in the amount of P10,000. What is the amount of goodwill to be reported in the consolidated Statement of Financial Position?
On Jan, 1 2024, NCDA Incorporated purchased 6,000 shares of the outstanding common stock of MT Corporation at acost of $140,000. MT had 30,000 shares of outstanding common stock. The total bok value and total fair value of MT' individual net asets on Jan 1, 2024, are $600,000 and $650,000, respectively. Asume that fair market value increments (i.e., the difference between the fair and book value of Brothers' assets) are depreciated using straight-line over years). The total fair value of hte 30,000 shares of MT's common stock on December 31, 2024, si $760,000. Both companies have a January through December fiscal year. The folowing data pertains ot Mountain Corporation during 2024: Dividends declared and paid, January 1 - December 31: $ 12,000 Netincome, January 1 - December 31: $18,000 1) Assume NCDA wil have significant influence over the financial and operating policies of MT, compute the goodwill (if any) on the acquisition. 2) Prepare the necesary entries of NCDA for 2024 under…
On January 1, 2022, Mojito Corporation purchased 20% (20,000 shares) of the outstanding stock of Dulcinea Corporation for $153,000. During 2022, Dulcinea Corporation paid total dividends of $45,000 and earned $80,000 in net income. At the end of 2022, Dulcinea Corporation’s stock had a fair market value of $155,000. Required: Prepare the journal entries that Mojito would make during 2022 assuming that they do NOT have significant influence over Dulcinea as a result of their stock ownership (i.e. fair value method). Prepare the journal entries that Mojito would make during 2022 assuming that they do have significant influence over Dulcinea as a result of their stock ownership (i.e. equity method).
3. On January 1, 2018, Hina Company acquired as a long-term investment a 20% ordinary share interest in Shivani Company. Hina paid P7, 000,000 for this investment when the fair value of Shivani’s net assets was P35, 000,000. Hina can exercise significant influence over Shivani’s operating and financial policies. For the year ended December 31, 2018, Shivani reported net income of P4,000,000 and declared and paid cash dividends of P1,600,000. How much revenue from the investment should Hina report for 2018? 4. On July 1, 2018, Melanie Company purchased 30,000 shares of Eagle Company’s 100,000 outstanding ordinary shares for P200 per share. On December 15, 2018, Eagle paid P400,000 in dividends to its ordinary shareholders. Eagle’s net income for the year ended December 31, 2018 was P1,200,000, earned evenly throughout the year. In its 2018 income statement, what amount of income from the investment should Denver report? 5. Savannah Company bought 40% of Diarra Company’s…
On March 1, 2022, Dolor Company purchased 5,000 shares of Susan Incorporated paying P12 each share including P2 per share transaction cost. The shares were designated as financial asset through other comprehensive income. These shares are selling at P15 per share on December 31, 2022. How much is the amount of unrealized gain (loss) in comprehensive income for the period ending December 31, 2021?
On January 1, 2021, April Company purchased 40% of the outstanding shares of another entity for P5,000,000 when the net assets of the investee amounted to P10,000,000. At acquisition date, the carrying amount of the identifiable assets and liabilities of the investee were equal to their fair values, except for equipment for which the fair value was P2,000,000 greater than its carrying amount and inventory whose fair value was P1,000,000 greater than its cost. The equipment has a remaining life of 4 years and the inventory was all sod during 2021. The investee reported net income of P6,000,000 for 2021 and paid no dividends during 2021. What is the maximum amount which could be included in April Company's income before tax to reflect April's equity in earnings of the investee?

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