Beef Company acquired 70% of Broccoli on January 1. On that date, the fair value of equipment with 3-year remaining life was P90,000 more than the book value. During the year Broccoli reported net income of 210,000. The non-controlling interest in net income for the year was P63,000. P33,000 P54,000 P72,000
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- Braviary Corp. acquired a 70% interest in Vullaby Company in 20A. For the year ended December 31, 20A and 20B, Vullaby Company reported an income of P160,000 and P180,000, respectively. During 20A, Vullaby sold merchandise to Braviary Corp. for P20,000 at a profit of P4,000. The merchandise was later resold by Braviary Corp. to outsider for P30,000 during 20B. For consolidation purposes, what is the minority interest's share of Vullaby's net income for 20A and 20B, respectively. * A. P49,200 and P52,800 B. Answer not given C. P53,200 and P50,000 D. P46,800 and P55,200 E. P48,000 and P54,000On January 2, 2022, S Company acquired 80% of the stocks of L Company for P2,000,000. On this date, L Company had P1,000.000 of Share Capital and P800,000 of Retained Earnings. The carrying values of the identifiable assets and liabilities of L are equal to their fair values. During the year. L ships merchandise to S costing P800.000 at 25% above cost. At the end of the year, records show the following: S Company L Company Inv. beg 350,000 120,000 Inv. end 400,000 5,500,000 2,500,000 3,250,000 1,680,000 200,000 Sales Purchases Operating Exp. Dividends paid 650,000 300,000 500,000 350,000 The ending inventory of S includes merchandise from L amounting to P50,000. The reported impairment of goodwill in 2022 is P20,000. The parent opted to measure NCI at fair value. In 2021, S Company sold inventory costing P50,000 to $ Company (90%- owned) for P100,000. By the end of the year, L sold 80% of the inventory. The elimination entries in 2022 would include: a. Credit to Cost of Sales, P100,000…On January 2, 2022, S Company acquired 80% of the stocks of L Company for P2,000,000. On this date, L Company had P1,000.000 of Share Capital and P800,000 of Retained Earnings. The carrying values of the identifiable assets and liabilities of L are equal to their fair values. During the year. L ships merchandise to S costing P800.000 at 25% above cost. At the end of the year, records show the following: S Company L Company 120,000 Inv. beg 350,000 Inv. end 400,000 200,000 Sales 5,500,000 2,500,000 3,250,000 1,680,000 650,000 Purchases Operating Exp. Dividends paid 300,000 500,000 350,000 The ending inventory of S includes merchandise from L amounting to P50,000. The reported impairment of goodwill in 2022 is P20,000. The parent opted to measure NCI at fair value. How much is the Consolidated Inventory on December 31, 2022? a.590,000 b.560,000 c.587,500 d.600,000
- Spartan Inc. acquired 15% (90,000 shs) of the outstanding common stock of Buckeye Inc. on January 1, 20B for $2,160,000 (price was $84,000 over net book value - all related to Spartan’s share of undervalued equipment with a remaining life of 12 years; depreciation is st-line). Buckeye reported net income of $1,460,000 and declared and paid $902,000 of cash dividends during 20B. Fair value of the Buckeye shares was $26/share at year end. Required: (a) Prepare the journal entries for Spartan Inc. for 20B (include the acquisition entry), assuming that Spartan cannot exercise significant influence over Buckeye. The securities are correctly accounted for using the fair value method (trading portfolio). (b) Assume now that Spartan acquires an additional 10% of Buckeye for $1,440,000 (total share is now 25%) and can exercise significant influence over Buckeye (equity method is required). The total purchase price of the 25% share ($3,600,000) was $140,000 over the book value of Buckeye’s…How much is the investment income to be reported at the end of the current year? At the beginning of current year, Courage Company acquired 25% of the outstanding shares of an investee at a total cost of P8,400, 000. At the time, the carrying amount of the net assets of Courage Company totaled P28, 800, 000. The investee owned equipment with 5-year remaining life and with a fair value P2, 400, 000 more than carrying amount. The investee owned land with a fair value of Pl, 200, 000 more than carrying amount. During the current year, the investee sold the land. At year-end, the investee reported net income of P6, 000, 000 declared and paid a cash dividend of P3, 600, 000 to shareholders at year-end. The fair value of the investment at year-end is P9, 000, 000. Q1. How much is the investment income to be reported at the end of the current year? Q2. How much is the carrying amount of the investment at year- end? Q3. How much is the implied goodwill from acquisition? Q4. What is the entry…On January 1, 2018, ICT Company purchased 80% of ESP Company's stock for P975,000. On this date, the carrying amount of ESP Company's net assets were P1,000,000. The fair value of ESP Company's identifiable assets and liabilities were the same as their carrying amount except for plant assets (net) which were P100,000 in excess of the carrying amount. For the year ended, ESP Company had a net income of P190,000 and paid cash dividends totaling P125,000. Parent opted to measure NCI proportionate to its share on ESP's identifiable net assets. In the December 31, 2018 consolidated balance sheet, NCI should be reported at:
- On January 1 of the current year, Yellow Company purchased 40% of the outstanding ordinary shares of Orange company paying P2,560,000 when the carrying amount of the net assets of Orange equaled P5,000,000. The difference was attributed to equipment which had a carrying amount of P2,200,000 and a fair value of P3,600,000. The remaining useful life of the equipment was 4 years. During the current year, Orange company, reported net income of P1,600,000 and paid cash dividends of P1,000,000. What amount should be reported as investment income for the current year? O 640,000 O 400,000 500,000 O 560,000People Co. acquired 80% of Steeple Co.'s common stock for $10,000,000 in cash on Jan. 2, 20x1. At that date, Steeple's 56,000,000 of net assets were fairly stated, except for an unrecorded intangible asset, favorable leases, with a $1,000,000 value (useful life of 10 years, straight-line amortization). The estimated fair value of the noncontrolling interests at the acquisition date was $2,000,000. People Co. accounts for its investment in Steeple Co. using the equity method. There are no intra-entity transactions and both firms are in the U.S.A It is now December 31, 20x3. Steeple reported net income of $250,000 for the current year, and declared and paid $40,000 in dividends. There were no impairments of Steeple's assets in 20x1, 20x2 or but goodwill is impaired by $100,000 in 20x3. Show consolidating entry R (relates to recognizing revalued assets and liabilities) that would be needed to present consolidated financial statements for 20x3.Positivism Corporation paid $150,000 for an 30% interest in Science Tech Corporation on January 1, 20X1 when the stockholders' equity of Science Tech consisted of $200,000 capital stock and $160,000 retained earnings. The following assets of Science Tech had fair values different from their book values when Positivism acquired its interest: Book Value Fair Value Inventories (sold in 20X1) $ 50,000 $ 60,000 Equipment (8-year life at the time of combination) Bonds Payable (matures 12/31/X5) 600,000 (500,000) 640,000 (525,000) During 20X1, Science Tech’s reported net income was $50,000 and dividends declared and paid were $10,000. 1. Calculate Excess/Difference: 2. Calculate Goodwill
- Accountancy Company acquired 75% of the outstanding shares of Finance Company for P900,000. Book value of Finance Company’s net assets is P1,000,000. Upon re-measurement of the acquiree’s net assets, it shows that inventory is overstated by P40,000 and an equipment held for 3 years has a fair value and book value of P420,000 and P360,000, respectively. The original cost of the equipment if P576,000 with no residual value. The NCI was measured at its fair value of P275,000. During the year, Accountancy reported net income from separate operation of P350,000 and received P42,000 dividend from Finance Company. The net income of Finance Company is reported at P135,000. Goodwill impairment attributable to the controlling interest is P13,500. Compute the consolidated net income attributable to the parent.Accountancy Company acquired 75% of the outstanding shares of Finance Company for P900,000. Book value of Finance Company’s net assets is P1,000,000. Upon re-measurement of the acquiree’s net assets, it shows that inventory is overstated by P40,000 and an equipment held for 3 years has a fair value and book value of P420,000 and P360,000, respectively. The original cost of the equipment if P576,000 with no residual value. The NCI was measured at its fair value of P275,000. During the year, Accountancy reported net income from separate operation of P350,000 and received P42,000 dividend from Finance Company. The net income of Finance Company is reported at P135,000. Goodwill impairment attributable to the controlling interest is P13,500.A. Compute the consolidated net income attributable to the parent. B. Determine the balance of Non-Controlling Interest – Net Assets Subsidiary (NCINAS).Accountancy Company acquired 75% of the outstanding shares of Finance Company for P900,000. Book value of Finance Company's net assets is P1,000,000. Upon re-measurement of the acquiree's net assets, it shows that inventory is overstated by P40,000 and an equipment held for 3 years has a fair value and book value of P420,000 and P360,000, respectively. The original cost of the equipment if P576,000 with no residual value. The NCI was measured at its fair value of P275,000. During the year, Accountancy reported net income from separate operation of P350,000 and received P42,000 dividend from Finance Company. The net income of Finance Company is reported at P135,000. Goodwill impairment attributable to the controlling interest is P13,500. 1. Compute the consolidated net income attributable to the parent. 2. Determine the balance of Non-controlling Interest - Net Assets Subsidiary (NCINAS)