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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On January 1, year 1, ABC Corporation purchased 80% of XYZ Corporation's P10 par common stock for P975,000. On this date, the carrying amount of XYZ's net assets was P1,000,000. The fair values of XYZ's identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net) with fair values of P100,000 in excess of their carrying amount. The fair value of the noncontrolling interest in XYZ on January 1, year 1, was P250,000. For the year ended December 31, year 1, XYZ had net income of P190,000 and paid cash dividends totaling P125,000. a. In the January 1, year 1 consolidated balance sheet, goodwill should be reported at?b. In the December 31, year 1 consolidated balance sheet, noncontrolling interest should be reported at?
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?
On August 31, 2020, Laida Corporation purchased all the net assets of Magtalas Corporation by transferring cash of P500,000 and issuing 40,000 ordinary shares with par value of P50 (current fair value is P60). The following are expenses incurred and paid by Laida Corporation in connection with the business combination on the date of acquisition: Underwriting costsP10,000Consultant’s fees20,000Newspaper publication fees5,000SEC registration fees8,000Stock exchange listing fees5,000Indirect acquisition costs12,000How much expense is charged to share premium?
On 1 July 2021, Safe Ltd acquired 100% of the shares of Mission Ltd for $500,000. On 1 July 2021, the equity of Mission Ltd consisted of: Share capital $300,000 General reserve $60,000 Retained earnings $75,000 All the identifiable assets and liabilities of Mission Ltd were recorded at fair value on 1 July 2021 except for: Carrying amount Fair value Inventories $ 90,000 $100,000 Plant (cost $300,000) $180,000 $200,000 The above plant has a further 5-year life with nil residual value and is expected to be used evenly over that time. During the year ended 30 June 2022, all inventories on hand at 1 July 2021 are sold. Corporate tax rate is 30%. The following intragroup transactions take place after the acquisition: a) On 1 May 2022, Mission Ltd sells inventory costing $50,000 to Safe Ltd for $80,000. On 30 June 2022, only 70% of these goods have been sold by Safe Ltd. b) On 1 March 2023, Mission Ltd sells inventory to Safe Ltd costing $120,000 for $160,000. At 30 June 2023, 20% of this…
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 January 1, 2020, Merlo Company acquired 80% of the stocks of Fritzie Company for P2,000,000. On this date, Fritzie Company had P1,000,000 of Capital Stock and P800,000 of Retained Earnings. On this date, the carrying values of the identifiable assets and liabilities of Fritzie Company are equal to their fair values.During the year, Merlo Company ships merchandise to Fritzie Company merchandise amounting to P800,000, which includes 25% gross profit rate. At the end of the year, records show the following: Merlo Company Fritzie CompanyInventories, Jan 1. P350,000 P120,000Inventories, Dec. 31 400,000 200,000Sales 5,500,000 2,500,000Cost of Sales 3,200,000 1,600,000Operating expenses 650,000 300,000Dividends paid 500,000 350,000The ending…
On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shares with a market price of P45 per share. The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for the following: 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 by P50,000. 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 There is no movement as to the ordinary shares of Luna Corp during the The unadjusted trial balance as of December 31, 2022 were as follows: Lucas Company Luna Corp Cash 2,240,000 1,800,000 Trade Receivables 1,000,000 960,000 Merchandise…
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 July 1, 2021, Diamante Co. paid P1,000,000 for 100,000 ordinary shares (40%) of Ashes Co. At that date, Ashes' net assets totaled P 2,500,000 and the fair values of all Ashes identifiable assets and liabilities were equal to their carrying amount. Ashes reported net income of P500,000 for 2021, of which P300,000 was for the 6 months ended December 31, 2021. Ashes paid cash dividends of P 250,000 on September 30, 2021. What amount of income should Diamante report from the investment in Ashe Co.? Start Select the correct response: essments P 120,000 erences P 100,000 Fessors P 80,000 dents P 200,000 abus ( Previous Continue > purses

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