9. ABC paid finder's fees of P80,000, legal fees of P26,000, audit fees related to stock issuance of P20,000, stock registration fees of P10,000 and stock listing application fees of P8,000. Based on the given information, under the acquisition method, what amount relating to business combination would be charged to expense?
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- RIVERDALE paid finder's fees of P80,000, legal fees of P26,000, audit fees related to stock issuance of P20,000, stock registration fees of P10,000 and stock listing application fees of P8,000. Based on the given information, under the acquisition method, what amount relating to business combination would be charged to expense?A corporation is studying the possibility of acquiring Entity E whose statement of financial position had the following balances at the date of valuation: Current assets 450,000 Investments 150,000 PPE-net 1,200,000 Accounts payable 130,000 Accrued liabilities 110,000 Bonds payable 300,000 Share capital 150,000 Share premium 510,000 Retained earnings 600,000 According to an appraisal report requested by the company, the investments had a fair value of P450,000 and the inventory was understated by P240,000. All other assets and equities are properly stated. An examination of Entity E's income for the last 4 years indicates that the net income has steadily increased by 20%. Entity E had a net operating income of P300,000 in the year of valuation. The valuation expert believes that a normal rate of return for a business of this type is 16%. Assets are expected to stay the same for the next 4 years. Determine the estimated value of Entity E assuming goodwill is computed through…4. An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct acquisition costs incurred were P140,000. On 31 December 2020 the fair value of the instrument was P1,100,000 and the transaction costs that would be incurred on sale were estimated at P120,000. If the investment is designated as FA@FVTOCI, what gain would be recognized in the financial statements for the year ended 31 December 2020? Group of answer choices Nil P40,000 P160,000 P420,000
- Won Hae Hyo Company, an investment entity, provided the following income and expenses for the current year: Dividend income from investments- P9,200,000; Distribution income from trusts- P500,000; Interest income on deposits- P700,000; Income from bank treasury bills- P100,000; Unrealized gain on derivative contract P400,000; Income from dealing in securities and derivatives held for trading- P600,000; Write-down of securities and derivatives held for trading- P150,000; Other income- P50,000; Finance cost- P300,000; Administrative staff costs- P3,800,000; Sundry administrative costs- P1,200,000 interest expense- P1,700,000. What is the total comprehensive income for the current year? A. P3,800,000 B. P4,200,000 C. P4,400,000 D. P9,200,0003. During the year, Chinawish Co. distributed property dividends in the form of inventories. The carrying amount on the date of declaration was P2,000,000 and the fair values, which approximated the net realizable values, were P1,600,000 on the date of declaration and P2,200,000 on the date of distribution. Requirement: Provide the journal entries on the dates of declaration and distribution.On January 1, 2024, Presidio Company acquired 100 percent of the outstanding common stock of Mason Company. To acquire these shares, Presidio Issued to the owners of Mason $329,000 in long-term liabilities and 20,000 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Presidio paid $32,500 to accountants, lawyers, and brokers for assistance in the acquisition and another $17,000 in connection with stock Issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Cash Presidio Company Mason Company $ 36,200 Items $ 81,900 Receivables 290,000 151,000 Inventory 378,000 178,000 Land 284,000 272,000 Buildings (net) 469,000 280,000 Equipment (net) 194,000 71,100 Accounts payable (179,000) (47,700) Long-term liabilities Common stock-$1 par value Common stock-$20 par value Additional paid-in capital Retained earnings, 1/1/24 (462,000) (329,000) (110,000) в 0 (120,000) (360,000) (585,900) (491,600) Note:…
- 2. On January 1, 20x1, an entity purchased marketable equity securities for P2,500,000. The entity paid commission and taxes of P190,000. The equity securities do not qualify as financial asset held for trading. The entity made irrevocable election to present unrealized gain and loss in other comprehensive income. The securities have a market value of P2,600,000, and P2,750,000 on December 31, 20x1 and December 31, 20x2. O n July 1, 2022, half of the securities are sold for P1,400,000. On December 31, 20x2, how much shall be shown in the statement of comprehensive income as unrealized gain/ loss? (sample answer: 10,500 UG or 10,500 UL)R15 000 still to be received, by the year end, out of the total amount receivable from a share issue should be reported on that company’s financial statements, as: a loss on the statement of income or an income in the statement of income or an asset on the statement of financial position or liability on the statement of financial position.The general ledger of Grumpy Corporation as of December 31, 2021, includes the following accounts: Соprights Deposits with advertising agency (will be used to promote goodwill) 27,000 Discount on bonds payable Excess of cost over fair value of identifiable net assets of Р30,000 70,000 acquired subsidiary Trademarks 90,000 90,000 In the preparation of Grumpy's balance sheet as of December 31, 2021, what should be reported as total intangible assets?
- 5. On January 1, 20x1, DIAPHANOUS Co. acquired all of the identifiable assets and assumed all of the liabilities of TRANSPARENT, Inc. by paying cash of P4,000,000. On this date, the identifiable assets acquired and liabilities assumed have fair values of P6,400,000 and P3,600,000, respectively. Additional information:In addition to the business combination transaction, the following have also transcribed during the negotiation period: a. After the business combination, TRANSPARENT will enter into liquidation and DIAPHANOUS agreed to reimburse TRANSPARENT for liquidation costs estimated at P80,000. b. DIAPHANOUS agreed to reimburse TRANSPARENT for the appraisal fee of a building included in the identifiable assets acquired. The agreed reimbursement is P40,000.c. DIAPHANOUS entered into an agreement to retain the top management of TRANSPARENT for continuing employment. On acquisition date, DIAPHANOUS agreed to pay the key employees signing bonuses totaling P400,000.d. To persuade, Mr.…nEED IN 10 MINUTES 9. On January 1, 20x1, an entity purchased marketable equity securities for P2,500,000. The entity paid commission and taxes of P190,000. The equity securities do not qualify as financial asset held for trading. The entity made irrevocable election to present unrealized gain and loss in other comprehensive income. The securities have a market value of P2,600,000, and P2,750,000 on December 31, 20x1 and December 31, 20x2. On July 1, 2022, half of the securities are sold for P1,400,000. On July 1, 2022, the net increase/ decrease in retained earnings account is (sample answer: 10,500 increase or 10,500 decrease)The Vary Company has total assets with a book value of $3,000,000 and a fair value of $4,000,000. A potential primary beneficiary company has guaranteed the debt of the Vary Company and will receive a share of income of the Vary Company based on contractual terms. The primary beneficiary will also have decision power. a. Will the primary beneficiary company record an investment in the equity of the Vary Company? b. Will the Vary Company need to be consolidated. If it is to be consolidated, what adjustments would be needed in the consolidation process?