Discuss the three qualitative factors set out in IFRS 10 Consolidated Financial Statements to determine the existence of "Control".
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- Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________. A. a credit to cash for $28,733 B. a debit to interest expense for $31,267 C. a debit to Discount on Bonds Payable for $1,267 D. a debit to Premium on Bonds Payable for $1.267Transfer between Categories On December 31, 2018, Leslie Company held an investment in bonds of Kaufmann Company which it categorized as being held to maturity. At that time, the 8%, 100,000 face value bonds had a carrying value of 107,023.56 and were being amortized using the effective interest method based on a market rate of 7%. Interest on these bonds is paid annually each December 31. On December 31, 2019, after recording the interest earned, Leslie decided to reclassify the Kaufmann bonds to its available-for-sale category in anticipation of a major restructuring. At that time, the ending quoted market price for the bonds was 105,000. Required: Prepare the journal entries on December 31, 2019, to record the interest earned and the reclassification.Waseca Company had 5 convertible securities outstanding during all of 2019. It paid the appropriate interest (and amortized any related premium or discount using the straight line method) and dividends on each security during 2019. Each of the convertible securities is described in the following table: Additional data: Net income for 2019 totaled 119,460. The weighted average number of common shares outstanding during 2019 was 40,000 shares. No share options or warrants arc outstanding. The effective corporate income tax rate is 30%. Required: 1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share. 2. Prepare a ranking of the order in which each of the convertible securities should be included in diluted earnings per share. 3. Compute basic earnings per share. 4. Compute diluted earnings per share. 5. Indicate the amount(s) of the earnings per share that Waseca would report on its 2019 income statement.
- On 1 January 2020, Company P purchased 80% of the equity of Company S. The following transactions arose at the acquisition date. Deferred cash payment Immediate cash payment Issue of P's shares Due diligence fees paid to lawyers Equipment transferred $1,000,000 payable 3 years later $500,000 1,200,000 shares $40,000 $30,000 Note: a. P's effective interest rate was 5% per annum. b. P's share price was $1.3. c. The fair value of non-controlling interests at acquisition date was $640,000. d. Share capital and Retained earnings of S were $1,000,000 and $900,000 respectively on 1 January 2020. On the same day, there was an intangible asset carried in S at $500,000 but the fair value of it was $800,000. e. Fair value of the equipment transferred was close to its book value. Required: a. Determine the fair value of the consideration transferred on 1 January 2020 in accordance with IFRS 3 Business Combinations. Round to the nearest integer. b. Prepare the journal entries in P's books on 1…On January 1, 2020 Psy Company purchased all the net assets of SM Ent. Company: Issuance of 20,000 unissued shares of its 10 par value ordinary share capital. As of this date, the shares of Psy were selling at 40 per share. Issuance of bonds with a face value of $300,000 but are currently at 110. A contingent payment of $200,000 cash on January 1, 2020, if the average income of SM Ent. Company during the two-year period (2020-2021) exceeds $250,000 per year. Psy estimates that there is a 20% chance or probability that the $200,000 payment will be required. Issuance of 5,000 additional shares on January 1, 2022 to the former shareholders of SM Ent. Company if the average income cover the next two years (2020-2021) equalled or exceeded $350,000. The additional 5,000 shares expected to be issued are valued at $75,000. Professional fees of $9,000 were also paid by Psy to its external auditors to finalize the business combination. As of the date of acquisition, SM Ent. Company reported…Following are the non-strategic Investment transactions of Corona Inc.: 2023 Jan. 1 Purchased for $91,145 an 8.58, 586,000 bond that matures in 20 years from anna Corporation when the market interest rate was 7.98. There was a $50 transaction fee included in the above-noted payment amount. Interest is paid semiannually beginning June 30, 2023. The acquisition vas made with intention to hold to maturity. June 30 Received interest on the bond. July 1 Paid $126,633 for a Trust Inc. bond with a par value of $131,000 and a fifteen-years ters. The bond pays interest quarterly beginning September 30, 2023, at the annual rate of 8.38; the market interest rate on the date of purchase was 8.7%. There was a $50 transaction fee included in the above-soted payment amount. Sept. 30 Received interest on the Trust bond. Dec. 31 Received interest on the lanna and Trust bonds. 31 The fair values of the bonds on this date equalled the fair values. Required: 1. For each of the bond investments, prepare an…
- At December 31, 2020 the following balances existed on the books of Kingsley Ltd.: Bonds Payable $1,840,000 Interest Payable 50,000 If the bonds are retired on January 1, 2021, for $2,040,000, what will the company report as a loss on redemption? Select one: a. $150,000 O b. $100,000 O c. $200,000 d. $250,000The following balances as at December 31. 2019 were exctracted from the trial balance of Candlelight Company Limited: DETAILS DR Promises a00,000 10% Mortgage Retained eaminge 400,000 620,000 Goodw General reserves Ordinary shares e2 10% Preference sharessos0 200,000 S5,000 400000 200,000 Share premium 55,000 Motor vehide 750,000 Provision for depreciation: Motor vehice 150,000 10N Debenture 350,000 Mortgage interest Debenture interest Cost of sales Closing stock 20.000 15.000 750,000 90,000 Insurance 30,000 Wages&salaries 60.000 Interm ordinary share dividend 32.000 Bank 53.000 Commission received 23,000 Provided that you have been told that the net loss after tax for the year ended December 31, 2019 is $450,000, transter to general reserves is $55.000. and preference shore dividend is to be accounted for in full, how much is the total retained eamingr at the end of the year? Select one a. $63000 b. 13245.000) C. ($277.000) a. $995.000On January 1, 2022, BTS Company purchased 3,000, P1,000 face value term bons with a stated rate of 10% as at amortized cost. The bonds pay interest annually on December 31 and will be redeemed entirely by the issuer on December 31, 2025. The bond investment was purchased for P2,819,100 at an effective rate of 12%.On December 31, 2023, the entity changes business model for managing its financial assets and this investment as reclassified as debt investments at fair value through profit or loss. On this date, the bonds are quoted at 101. What is the carrying value of the debt investment on December 31, 2023 prior to reclassification?
- On January 1, 2023 AAA Company acquired BBB Company 10%, P600,000 bonds for P621,300. The bonds which pays interest on every June 30 and December 31. The bond will mature on January 1, 2028 and were purchased to yield 9%. The business model of the AAA Company in managing investment is to hold the asset in order to collect the contractual cash flows. 1. how much is the interest income in 2023 2.how much is the carrying amount of the bonds at december 31,2023 3.how much is the unamortized portion of premium on december 31, 2024 4. how much cash to be debited on december 31,2024On July 1, 2003, East Company purchased as a long-term investment, P500,000 face amount, 8% bonds of Rand Corp. for P461,500 to yield 10% per year. The bonds pay interest semiannually on January 1 and July 1. In its December 31, 2003 balance sheet, East should report interest receivable of a. 18,460 b. 20,000 c. 23,075 d. 25,000On January 02, 2022. Milk Tea Company purchased 8% P1,000,000 face value bonds of Matcha Corporation of P922.768 and designated as at fair value through profit or loss (FVTPL) Transaction costs incurred by Milk Tea Company relative to the acquisition is P30,000. These bonds mature on December 31, 2026. The bonds were purchased to yield 10%. Interest is payable semi annually every June 30 and December 31. On December 31, 2022, the bonds are quoted 99 while on December 31, 2023, the bonds are quoted @ 102. On April 30, 2024, Milk Tea Company sold P600,000 face value bonds @ 101 plus accrued interest Which of the following is part of the entries of Milk Tea Company to be recognized in 2022? A.) Credit Unrealized Gain on DI at FVTPL - 37,232 B.) Credit Cash - 952,768 C.) Debit Debt Investment at FVTPL - 952,768 D.) Credit Interest Revenue - 73,821.44