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- Action, Inc. acquired the following assets and assumed the related liabilities of Slacker Corp. in a transaction completed on February 16, 2023: Accounts receivable, net Inventories Property, plant & equipment Non-amortizable intangible assets Carrying value for Slacker Current liabilities Noncurrent liabilities $ 11,000 $ 50,000 $ 100,000 $ 200,000 Fair Value $ 10,000 $ 50,000 $ 150,000 $ 225,000 $ (40,000) $(200,000) $ (40,000) $(200,000) Action paid $205,000 in cash for all of the above from Slacker. a) Determine if Action must record any goodwill. Show any calculations. b) Record the acquisition in Action's general journal on Feb. 16, 2023. Show: any calculations. c) Prepare any adjusting entry for amortization required as of the fiscal year end, December 31, 2023. If no amortization is required, explain why.Shak Company acquired a financial instrument for P4,000,000 on March 31, 2020. The financial instrument is classified as financial asset at fair value through other comprehensive income. The direct acquisition cost incurred amounted to P700,000. On December 31, 2020, the fair value of the instrument was P5,500,000 and the transaction costs that would be incurred on the sale of the investment are estimated at P600,000. What gain should be recognized in statement of financial position for the year ended December 31, 20207 Select the correct response 900,000 200,000 800,000As of December 31, 20X4, Blue Co.’s statement of financial position shows the book values of $15,000,000 for total assets and $12,000,000 for total liabilities. Also on December 31, 20X4, an appraisal shows the fair values of $18,500,000 for total assets and $14,000,000 for total liabilities. Green Co. purchased all of the net assets of Blue Co. on December 31, 20X4 for $5,500,000. What amount of goodwill, if any, did Green Co. record on the acquisition date? a. $2,500,000 b. $1,000,000 c. $4,500,000 d. $0
- Surreal Company accounted for non-current assets using the revaluation model. On October 1, 2021, the entity classified a land as held for sale. At that date, the carrying amount of the land was P5,000,000 and the balance in the revaluation surplus was P1,500,000. At same date, the fair value of the land was estimated at P5,500,000 and the cost of disposal at P100,000. On December 31,2021, the fair value less cost of disposal of the land did not change. The land was sold on January 31,2022 for P6,000,000. Required: 1. What is the adjusted carrying amount of the land on December 31,2021? a. 5,000,000 b. 5,500,000 c. 5,400,000 d. 3,500,000 2. What amount should be reported as impairment loss for 2021? a. 100,000 b. 400,000 c. 500,000 d. 0 3. What amount should be reported as revaluation surplus on December 31,2021? a. 1,500,000 b. 2,000,000 c. 1,000,000 d. 1,900,000 4. What amount should be reported as gain on disposal of land in 2022? a. 1,000,000 b. 2,600,000 c. 500,000 c. 600,000Surreal Company accounted for non-current assets using the revaluation model. On October 1, 2021, the entity classified a land as held for sale. At that date, the carrying amount of the land was P5,000,000 and the balance in the revaluation surplus was P1,500,000. At same date, the fair value of the land was estimated at P5,500,000 and the cost of disposal at P100,000. On December 31,2021, the fair value less cost of disposal of the land did not change. The land was sold on January 31,2022 for P6,000,000. Required: 1. What amount should be reported as impairment loss for 2021? a. 100,000 b. 400,000 c. 500,000 d. 0 2. What amount should be reported as revaluation surplus on December 31,2021? a. 1,500,000 b. 2,000,000 c. 1,000,000 d. 1,900,000Surreal Company accounted for non-current assets using the revaluation model. On October 1, 2021, the entity classified a land as held for sale. At that date, the carrying amount of the land was P5,000,000 and the balance in the revaluation surplus was P1,500,000. At same date, the fair value of the land was estimated at P5,500,000 and the cost of disposal at P100,000. On December 31,2021, the fair value less cost of disposal of the land did not change. The land was sold on January 31,2022 for P6,000,000. REQUIRED: 1. What amount should be reported as gain on disposal of land in 2022? a. 1,000,000 b. 2,600,000 c. 500,000 d. 600,000
- HAPPY Corp. assets have a carrying amount of P100,000 before year end adjustments. The PFRSs require these assets to be measured at fair value at each reporting date. Location is a characteristic of the assets. Information at year end is as follows: Active Market #i Quoted Price P340,000, Transport Cost-P25,000, Cost to Sell -P35,000 and Active Market #2 Quoted Price - P387,000, Transport Cost -29,000. Cost to Sell- 18,000. A} If Active Market #1 is the principal market for Entity A's biological assets, how much is the fair value? B)If neither Active Market#1 nor Active Market #2 is the principal market, how much is the fair value? A. P315,000; P358,000 B. P280,000; P358,000 C. P315,000; P340,000 D. P280,000;P340,000HAPPY Corp. assets have a carrying amount of P100,000 before year end adjustments. The PFRSs require these assets to be measured at fair value at each reporting date. Location is a characteristic of the assets. Information at year end is as follows: Active Market #i Quoted Price P340,000, Transport Cost-P25,000, Cost to Sell -P35,000 and Active Market #2 Quoted Price - P387,000, Transport Cost -29,000. Cost to Sell- 18,000. A} If Active Market #1 is the principal market for Entity A's biological assets, how much is the fair value? B)If neither Active Market#1 nor Active Market #2 is the principal market, how much is the fair value?On July 1, 2020, Philip Company acquired the net assets of Shayne Company for a consideration transferred of P32,000,000. At the acquisition date, the carrying amount of Shayne’s net assets was P20,000 and a temporary appraisal of P28,000,000 was attributed to the net assets. At December 31, 2020, a provisional fair value of P27,000,000 was attributed to the net assets. An additional valuation received on March 31, 2021 increased this provisional fair value by P2,000,000 and on May 31, 2021 this fair value was finalized at P30,000,000. Goodwill is tested for impairment on December 31, 2021 and deemed impaired by P200,000. What amount should the surviving company present for goodwill in its separate statement of financial position as of December 31, 2020?
- On January 1, 2021, ABC acquired all the assets and assumed all the liabilities of DEF Co. for P4,500,000. Relevant information follows: ASSETS Carrying Value 55,000 800,000 Fair Values 55,C00 Cash Receivable 800,C00 150,000 700,000 3,500,000 150,000 1,555,000 180,C00 750,C00 4,000,C00 200,C00 1,555,0000 Allowance for Doubtful Accounts Inventory Land Goodwill Liabilities DEC Co. has research and development projects with fair value of P100,000. ABC does not intend to use those R&Ds. However, there have been exchange transactions involving the information generated from DEF, but those transactions are infrequent > All fair value adjustments result to temporary differences but do not affect the tax bases of the assets and liabilities. The taxrate is 30%. > ABC incurred P200,000 on general administrative costs of maintaining an internal acquisition department. Compute the goodwill (gain on bargain purchase)?On February 14, 2022, Frozen Company classified a non-current asset as held for sale. At that time, the asset's carrying amount was P64,000. It's fair value was estimated at P48,000 and the cost to sell at P3,800. On May 9, 2022, the asset was sold for P42,000 and paid transaction costs of P2,000. The company accounts for non-current assets using the cost model. 9. How much impairment loss is to be recorded by Frozen relating to the non-current assets held for sale? 10. At what amount should the non-current assets held for sale be recorded on Feb. 14, 2022? 11. How much gain(loss) is to be reported by Frozen on the disposal of the non-current assets held for sale?Among the assets of Lucas Company on December 31, 2021 are the following:Land held for long-term capital appreciation 3,500,000Land held for a currently undetermined future use 5,700,000Building included in inventory 16,600,000Land held for long-term speculation 1,400,000Equipment leased out under an operating lease 500,000Building rented out under finance lease 10,900,000Land owned by the entity and leased out under an operating lease 7.800,000Building owned by the entity and leased out under operating lease 11,800,000Land held for future site 5,600,000Building that is currently vacant but is held to…