Description Proceeds Basis Date Acquired Date Sold 600 shares KB Corp Stock $ 63,000 $54,500 7/1/15 8/1/23 Collectible Painting $ 24,000 $18,500 4/15/06 5/17/23 500 shares Jameson, Inc. Stock $16,500 $ 19,000 11/14/20 9/4/23 450 shares Y2K Corp Stock $ 22,000 $ 24,000 11/14/22 9/4/23 100 shares LL Corp Stock $ 165,500 $ 129,000 1/17/18 1/19/23 300 shares Donovan, Inc. Stock $62,400 $ 70,700 1/17/18 1/19/23 What is the total capital gains tax due to the above capital asset transactions?
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- Gumiho Corporation acquired Forest Company through an exchange of common shares. All of Forest's assets and liabilities were immediately transferred to Gumiho. Gumiho's common stock was trading at P20 per share at the time of exchange. Following selected information is also available. Par value of shares outstanding Additional Paid-in Capital Before Acquisition P400,000 P700,000 After Acquisition P500,000 P1,100,000 Based on the proceeding information, what is the number of shares was issued at the time of the exchange? 25,000 35,000 20,000 10,000 The Alhambra Company had these accounts at the time it was acquired by Kingdom Co.: Cash P 108,000 Accounts Receivable 1,371,000 Inventories 360,000 PPE 1,948,200 Accounts Payable 1,052,400 Kingdom Co. paid P4,200,000 for net assets of Alhambra Company. It has determined the fair market values of investment and PPE were P399,000 and P2,700,000, respectively. An assumed contingent liability arising from past events with a fair value amounting…Ames Corporation repurchases 10,000 shares of its common stock for $12 per share. The shares were originally issued at an average price of $10 per share. Later it resells 6,000 of the shares for $15 per share and the remaining 4,000 shares for $17 per share. How much gain or loss should Ames report on its income statement as a result of these transactions? $38.000 gain $0 $20,000 loss $20,000 loss and $38,000 gainDougie sold the following stocks in year 5: Date Purchased Stock Cost Date Sold Proceeds from Sale 54.000 $10,000 V6/YR3 12/31/YR5 $3.000 $12,000 $14,000 4/21/YR4 12/31/YRS $12,000 $12,500 12/31/YRS $13,800 What is the overall net capital gain/loss of the above transactions and what is the tax treatment of the gain/loss? Y 7/2/YRS 12/31/YRS 11/30/YRS Multiple Cholce $5,300 LTCG taxed at preferential rates $5,300 STCG taxed at ordinary rates $5,000 LTCG taxed at preferential rates and $30O STCG taxed at ordinary rates $5,000 STCG taxed at ordinary rates and $300 LTCG taxed at preferential rates $4,700 LTCG taxed at preferential rates
- Question Armadillo Enterprises acquired the following equity investmentsat the beginning of year 1 as trading investments. Description Number of shares Market price per share Total price Finestra Company 15,000 X $25 $387,500 BVD Company 20,000 x$18 |S360,000 Market values at theend of Years 1 &2 are presented below: Market/Fair Value End of year 1 End of year 2 Finestra Company IS19 $23 BVD Company $22 $28 REQUIREMENTS: ( Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises sells 15,000 shares of BVD Company for $16at the beginning of year 2. Prepare the journal entry to record thesale. Prepare the adjusting journal entry required at the end of year2. Assume that ArmadilloEnterprises now holds these investments asavailable-for-sale. Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo…Question 3: On June 10, 20X8, Tower Corporation acquired 100 percent of Brown Company's common stock. Summarized balance sheet data for the two companies immediately after the stock acquisition are as follows: Item Cash Accounts Receivable Inventory Buildings & Equipment (net) Investment in Brown Stock Total Accounts Payable Bonds Payable Common Stock Retained Earnings Total Tower Corp. $ 15,000 30,000 80,000 120,000 100,000 $345,000 $ 25,000 150,000 55,000 115,000 $345,000 Brown Company Book Value $ 5,000 10,000 20,000 50,000 $85,000 $3,000 25,000 20,000 37,000 $85,000 Fair Value $5,000 10,000 25,000 70,000 $110,000 $3,000 25,000 $ 28,000 Required: Give the consolidation entries required to prepare a consolidated balance sheet immediately after the acquisition of Brown Company shares. Worksheet is not required.P acquired 90% of S's stock of S on 1/1/x1 for $430,000 when it was selling for $21/share S balance sheet on 1/1/x1: ASSETS LIAB. & SE CASH 10,000 CURRENT LIAB 30,000 ACCTS REC 25,000 COMMON STOCK 100,000 INVENTORY 90,000 PIC 15,000 TOTAL CA 125,000 R/E 60,000 BUILDING 80,000 TOTAL SE 175,000 TOTAL ASSETS TOTAL LIAB & SE 205,000 205,000 Market values were equal to book values, except the building has a market value of 220,000. The building had a remaining useful life of 20 years. P's share of the Goodwill implied in the purchase price was $146,500. The fair value of NCI was $42,000. The resulting value of goodwill for the total company was $157,000 During 20x1: S declared dividends of $30,000 of which $10,000 was unpaid at year end. S reported income of $100,000. At year end, goodwill is reviewed for impairment and its value is determined to be $141,300. Under the equity method, P would have reported income from S calculated as follows: P share of reported profits Depreciation…
- Jackie Inc. made the following capital transactions on a domestic share not listed in the exchangeJanuary 15 - purchased 25,000 shares at P16 eachJanuary 31 - purchased 10,000 shares at P20 eachMarch 1 - sold 20,000 of January 15 shares at P15 eachApril 25 - sold 8,000 of January 31 shares at P25 each On the return to be filed for the April 25 sale, what amount should be reflected in Item 11?Item No. 11 is based on the following information: air IE sedmeo90 000,002 9 6 000,048 9 42 d Alpha Company was incorporated at the beginning of this year with the following authorized capitalization: 15.39.d M2.9 termotr and on 21 o 200,000, 10% cumulative preference shares, par P 50; and sqmo) sinan to 1009 o 200,000 ordinary shares, no-par, P 100 stated value shares. 9V91- During the year, Alpha issued 50,000 preference shares at P 60 per share and 150,000 ordinary shares for a total of P 18,000,000. In addition, subscriptions for 20,000 preference shares were taken in December this year at a purchase price of P 100 per share. These subscribed shares will be paid in ! January next year. Profit for this year was P 5,000,000. I 11. What should Alpha report as total contributed capital on its balance sheet as at December 31 this year? c. P 26,000,000.22.09 I a. P 21,000,000. [ d. P 28,000,000. b. P 23,000,000.),81 9 OH 20PROBLEM V. On January 2, 2020, P Company acquired 80% interest in S Company for P4,125,000 cash. On this date, the outstanding ordinary share capital and accumulated profits of P Company and S Company are as follows: P Company S Company Ordinary share capital P2,250,000 P1,312,000 Share premium 1,500,000 Accumulated profits (losses) 5,250,000 3,187,500 There was no issuance of ordinary shares during the year. Noncontrolling interest is initially measured at fair value. Fair value of the following assets of S Company exceeded their book values as follows: Inventories, P210,000; Property and equipment (remaining useful life 10 years), P127,500. All other assets and liabilities are fairly valued. Goodwill if any is not impaired. On December 31, 2020, the two companies reported the following operating results: P Company S Company Net income P1,785,000 P975,000 Dividends paid 525,000 262,500 1. Compute for the consolidated shareholders' equity.
- The investments of Harlon Enterprises included the following cost and fair value amounts ($ in millions): Fair Value, Dec. 31 2022 N/A $ 37 Equity Investments A Corporation shares B Corporation shares C Corporation shares. D Industries shares Totals Cost $ 20 35 15 45 $115 1 Increase 2 Amount Harlon accounts for its equity investment portfolio at fair value through net income. Harlon sold its holdings of A Corporation shares on June 1, 2022, for $15 million. On September 12, it purchased the C Corporation shares. $ 2021 $ 14 Required: 1. What is the effect of the sale of the A Corporation shares and the purchase of the C Corporation shares on Harlon's 2022 pretax $ 35 N/A 46 $95 earnings? 2. At what amount should Harlon's securities equity investment portfolio be reported in its 2022 balance sheet? (For all requirements, enter your answers in millions, (i.e., 10,000,000 should be entered as 10).) 14 50 $101 6 million 5 milion4. On January 1, 2023, Pantop Corporation acquired 85% of the outstanding common stock of Song Company for $578,000. There was no control premium. The following information about Song Company on January 1, 2023 was available: Book value Fair value Cash Inventory Building Total Accounts Payable Common Stock Add. Paid-in Capital Retained Earnings Total 193,000 40,000 180,000 413,000 3,000 200,000 110,000 100,000 413,000 193,000 39,400 200,000 432,400 3,000 Pantop uses the complete equity method to account for its investment in Song. During 2023, Song had a net income of $72,000. The remaining useful life of the building was five years with no salvage value. Song uses straight line depreciation. Song's cost of goods sold (FIFO) was $50,000 in 2023. On December 23, 2023, Song declared and paid $48,000 cash dividend to its shareholders. Goodwill was unimpaired as of December 31, 2023. (i) Prepare journal entries for Pantop to record under the complete equity method of accounting the…The following are the balance sheet of FAR and SAR Co. when P decided to acquire 4,500 SHARES of S for P577,800: FAR SAR Company Company 850,000 200,000 600,000 1,260,000 2,910,000 300,000 2,000,000 400,000 210,000 2,910,000 50,000 100,000 200,000 450,000 800,000 200,000 500,000 Cash Receivables Inventories Plant and equipment Total Liabilities Share capital, par P100 Share premium Retained earnings 100,000 800,000 Total Assume that FAR acquired the 4,500 shares of stocks of SAR by issuing 5,000 of its shares with a market value of P115.56 and on this date the market values of S inventories and PPE are P210,000 and P470,000 respectively. (Use Full Goodwill Method) 1. Regular journal entry to record the business combination transaction. 2. Working paper adjustment and elimination entry for consolidation purposes.