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- Ariadne Corporation acquired the net assets of Turgo Corporation by issuing 10,000 ordinary shares with par value of P10 and bonds payable with a face amount of P500,000. The bonds are classified as financial liability at amortized cost.At the time of acquisition, the ordinary shares are publicly quoted at P20 per share. On the other hand, thebonds payable, classified as financial liability at amortized cost, are trading at 110.Ariadne paid P10,0000 share issuance costs and P20,000 bond issue costs. It also paid P40,000 acquisition related costs and P30,000 indirect costs of business combination.Before the date of acquisition, Ariadne and Turgo reported the following data:Ariadne TurgoCurrent assets 1,000,000 500,000Non-current assets 2,000,000 1,000,000Current liabilities 200,000 400,000Non-current liabilities 300,000 500,000Ordinary shares 500,000 200,000Share premium 1,200,000 300,000Retained earnings 800,000 100,000At the time of acquisition, the current assets of Ariadne have fair…On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…
- On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…On 30 June 2022, Southside Ltd purchased 5000 corporate bonds in ABC Ltd at $10.00 per bond. On acquisition, Southside Ltd classified this investment in financial assets as being ‘measured at fair value through other comprehensive income’. At 30 June 2023, the fair value of the corporate bonds had increased to $14.00. At 30 June 2024 the fair value of the corporate bonds had decreased to $13.00. All of the corporate bonds were sold on 30 June 2024. At 30 June 2022, the only equity item was paid-up capital of $100 000. And this has not changed. The applicable tax rate is 30 per cent.REQUIREDPrepare an extract of the statement of profit or loss and other comprehensive income, and statement of changes in equity, for the reporting period ending 30 June 2024 in which the reclassification adjustment for financial assets measured at fair value through other comprehensive income is detailed.Van Company purchased P5,000,000 of bonds at par. The entity has elected the fair value model for this investment. At year-end, the entity received annual interest of P200,000 and the fair value of the bonds was P4,705,000. What total income or loss from bond investment should be reported in the income statement? O a. 495,000 income O b.200,000 income O . 95,000 loss o d. 295,000 loss
- Please show the complete solution.. Thank you... 1. Ariadne Corporation acquired the net assets of Turgo Corporation by issuing 10,000 ordinary shares with par value of P10 and bonds payable with a face amount of P500,000. The bonds are classified as financial liability at amortized cost. At the time of acquisition, the ordinary shares are publicly quoted at P20 per share. On the other hand, the bonds payable, classified as financial liability at amortized cost, are trading at 110. Ariadne paid P10,0000 share issuance costs and P20,000 bond issue costs. It also paid P40,000 acquisition related costs and P30,000 indirect costs of business combination. Before the date of acquisition, Ariadne and Turgo reported the following data: Ariadne Turgo Current assets ₱1,000,000 ₱500,000 Non-current assets 2,000,000 1,000,000 Current liabilities 200,000 400,000 Non-current liabilities 300,000 500,000 Ordinary shares 500,000 200,000 Share…On January 1, 20x1, ABC Co. acquired 10%, P1,000,000 bonds for P827,135. The bonds mature on December 31, 20x3 and pay annual interest every December 31. ABC Co. incurred transaction costs P80,000 on the acquisition. The effective interest rate adjusted for the effect of the transaction costs is 14%. The bonds are to be held under a "hold to collect and sell" business model. Information on fair values is as follows: December 31, 20x1...............98 December 31, 20x2..............102 December 31, 20x3..............100 9.How much is the carrying amount of the investment on December 31, 20x1? a. 935,134 b. 1,002,000 c. 980,000 d. 965,443 10. How much is the unrealized gain (loss) recognized in other comprehensive income on December 31, 20x1? a. 45,866 b. (45,866) c. (37,899) d. 0 11. How much is the interest income recognized in 20x2? a. 126,999 c. 135,088 b. 130,779 d. 144,388Taylor Company acquired the assets and assumed the liabilities of Swift Inc. on June 30, 2022. The consideration transferred by the acquirer were as follows: Cash amounting to P2,000,000. Issued 10,000 ordinary shares at P10 par with a market price of Issued 5 year interest bearing bonds payable with a face value of P3,000,000 with a nominal rate of 10% and effective interest of 12%. (use two decimal places for the present value factor) Acquisition related costs incurred were as follows: Legal fees amounting to P120,000, 70% of which is not yet Share issue costs paid amounted to P15,000. Bond Issue costs paid amounting to P120,000. The Balance Sheet of the two entities before acquisition were as follows: Taylor Company Swift Inc. Total Assets 16,500,000 5,235,000 Total Liabilities 2,500,000 500,000 Ordinary Shares 5,000,000 1,250,000 Share premium 1,500,000 750,000 Retained Earnings 6/30/22 7,500,000 2,735,000 It was…
- On January 1, 20x1, an entity has an outstanding note payable with carrying amount of P1,000,000. On this date, the debtor agrees to receive 10,000 shares of theentity with par value per share of P10 in full settlement of the note payable. The shares are currently selling at P75 per share. Requirements: a. Compute for the gain or loss on the derecognition of the note payable. b. Provide the entry to record the derecognition of the note payable.A Company acquired the assets and assumed the liabilities of B Inc. on June 30, 2022. The consideration transferred by the acquirer were as follows: • Cash amounting to P2,000,000. • Issued 10,000 ordinary shares at P10 par with a market price of P15. • Issued 5 year interest bearing bonds payable with a face value of P3,000,000 with a nominal rate of 10% and effective interest of 12%. (use two decimal places for the present value factor) Acquisition related costs incurred were as follows: • Legal fees amounting to P120,000, 70% of which is not yet paid. • Share issue costs paid amounted to P15,000. • Bond Issue costs paid amounting to P120,000. The Balance Sheet of the two entities before acquisition were as follows: A Company B Inc.Total Assets 16,500,000 5,235,000Total Liabilities 2,500,000 500,000Ordinary Shares 5,000,000 1,250,000Share premium 1,500,000 750,000Retained Earnings 6/30/22 7,500,000 2,735,000It was determined that the book value of the assets and liabilities of the…Ed Company acquired the assets and assumed the liabilities of Sheeran Inc. on June 30, 2022. The consideration transferred by the acquirer were as follows: Cash amounting to P2,000,000. Issued 10,000 ordinary shares at P10 par with a market price of P15. Issued 5 year interest bearing bonds payable with a face value of P3,000,000 with a nominal rate of 10% and effective interest of 12%. (use two decimal places for the present value factor) Acquisition related costs incurred were as follows: Legal fees amounting to P120,000, 70% of which is not yet paid. Share issue costs paid amounted to P15,000. Bond Issue costs paid amounting to P120,000. The Balance Sheet of the two entities before acquisition were as follows: Ed Company Sheeran Inc. Total Assets 16,500,000 5,235,000 Total Liabilities 2,500,000 500,000 Ordinary Shares 5,000,000 1,250,000 Share premium 1,500,000 750,000 Retained Earnings 6/30/22 7,500,000 2,735,000…