25 - On 11/2019, R Co acquired 80% of F Co common stock for $172,000 in cash. At the acquisition date,the book values and fair value of assets and liabilities were equal, and the fair value of the noncontrollinginterest was equal to 20% of the total book value of F CO. The stockholders' equity accounts of the twocompanies at the acquisition date are RF common stock(5@par 500,000 100,000 additional paid in capital300,000 40,000 retained earning 350, 000 75,000 Noncontrolling interest was assigned income of $5, 500 inR consolidated income statement for 2019, Based on the preceding information. what amount will beassigned to the noncontrolling interest net assets on 1/1/2019, in the consolidated balance sheet? Selectone: a. 25,000 b. 43,000 c. 22,000 d. 34, 400

The total stockholders' equity in the consolidated Balance Sheet will include the total…

Answered: 25 - On 11/2019, R Co acquired 80% of F…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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11
es On January 1, 2023, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Incorporated, for $1,107,000 in cash and stock options. At the acquisition date, NetSpeed had common stock of $1,150,000 and Retained Earnings of $57,500. The acquisition-date fair value of the 10 percent noncontrolling interest was $123,000. QuickPort attributed the $22,500 excess of NetSpeed's fair value over book value to a database with a five-year remaining life. During the next two years, NetSpeed reported the following: Items 2023 2024 Net Income $ 31,500 45,000 Dividends Declared $ 4,500 4,500 On July 1, 2023, QuickPort sold communication equipment to NetSpeed for $28,500. The equipment originally cost $32,500 and had accumulated depreciation of $5,500 and an estimated remaining life of three years at the date of the Intra-entity transfer. Required: a. Compute the equity method balance in QuickPort's Investment in NetSpeed, Incorporated, account as of December 31, 2024. b.…
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.…
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On January 1, 2019, GRANGER Co. acquired 80% interest in HISTORIA, Inc. by issuing 5,000 shares with fair value of P30 per share and par value of P20 per share. The financial statements of GRANGER Co. and HISTORIA, Inc. immediately after the acquisition are shown below: Jan. 1, 2019 GRANGER Co. HISTORIA, Inc. Cash 20,000 10,000 Accounts receivable 60,000 24,000 Inventory 80,000 46,000 Investment in subsidiary 150,000 Equipment 400,000 100,000 Accumulated depreciation (40,000) (20,000) Total assets 670,000 160,000 Accounts payable 40,000 12,000 Bonds payable 60,000 - Share capital 340,000 100,000 Share premium 130,000 - Retained earnings 100,000 48,000 Total liabilities and equity 670,000 160,000 On January 1, 2019, the fair value of the assets and liabilities of HISTORIA, Inc. were determined by appraisal, as follows: HISTORIA,…
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?
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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?
20-Hamad Traders acquired 20,000 shares of Muscat lightings at OMR 3 per share on January 2019. The transaction cost incurred was OMR 500. The investment is classified as available for sale. The shares are actively traded in the market. On December 31, 2019 the fair value of Muscat lightning’s shares decreased to OMR 2.7 per share. What is the journal entry for initial recognition if management choose to include the transaction cost in the cost of investment? a. None of the option is correct b. Investment account Debit 60,000; Cash Account Credit OMR 60,000 c. Investment account Debit 60,500; Cash Account Credit OMR 60,500 d. Investment Account Debit 59,500; Miscellaneous expense account Debit OMR 500; Cash Account Credit OMR 60,000 Clear my choice
On 1 January 20X0 Alpha Co purchased 90,000 ordinary $1 shares in Beta Co for $270,000. At that date Beta Co's retained earnings amounted to $90,000 and the fair values of Beta Co's assets at acquisition were equal to their book values. Three years later, on 31 December 20X2, the statements of financial position of the two companies were: Alpha Co Beta Co $ $ Sundry net assets 230,000 260,000 Shares in Beto 180,000 - Share capital Ordinary shares of $1 each 200,000…
22-On January, 2019, ABC Company acquired 30% percent of the voting shares of XYZ Company for OMR 300,000. The investment gives ABC, significant influence over the affairs of XYZ Company. During the year ending December 31, 2019, XYZ Company earned OMR 100,000 Net Income and paid dividend of OMR 70,000. What is the journal entry in the books of ABC Company for the share in the net income under equity method? a. Debit Cash Account OMR 21,000; Credit Investment Income Account OMR 21,000 b. Debit Investment Account OMR 30,000; Credit Investment Income Account OMR 30,000 c. Debit Cash Account OMR 30,000; Credit Investment Account OMR 30,000 d. Debit Investment Account OMR 21,000; Credit Dividend Income Account OMR 21,000 Clear my choicevvv

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