he following separate income statements are for Burks Company and its 80 p Foreman $ (306,000) 228,000 (18,000) Revenues Expenses Gain on sale of equipment Equity earnings of subsidiary Net income Outstanding common shares dditional Information comp Burks $ (406,000) 320,000 0 (55,000) $ (141,000) 60,000 $ (96,000) 25,000
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- The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company: Burks Foreman Revenues $ (400,000 ) $ (300,000 ) Expenses 290,000 225,000 Gain on sale of equipment 0 (15,000 ) Equity earnings of subsidiary (52,000 ) 0 Net income $ (162,000 ) $ (90,000 ) Outstanding common shares 50,000 30,000 Additional Information Amortization expense resulting from Foreman’s excess acquisition-date fair value is $25,000 per year. Burks has convertible preferred stock outstanding. Each of these 5,000 shares is paid a dividend of $4 per year. Each share can be converted into four shares of common stock. Stock warrants to buy 10,000 shares of Foreman are also outstanding. For $20, each warrant can be converted into a share of Foreman’s common stock. The fair value of this stock is $25 throughout the year. Burks owns none of these warrants. Foreman has convertible bonds payable that…The following separate income statements are for Burks Company and its 80 percent-owned subsidiary, Foreman Company: Foreman $ (332,000) 241,000 (31,000) Revenues Expenses Gain on sale of equipment Equity earnings of subsidiary Net income Outstanding common shares Additional Information Burks $ (400,000) 286,000 Basic Diluted 0 (65,000) $ (179,000) 63,000 • Amortization expense resulting from Foreman's excess acquisition-date fair value is $35,000 per year. • Burks has convertible preferred stock outstanding. Each of these 9,000 shares is paid a dividend of $5 per year. Each share can be converted into five shares of common stock. • Stock warrants to buy 10,000 shares of Foreman are also outstanding. For $16, each warrant can be converted into a share of Foreman's common stock. The fair value of this stock is $20 throughout the year. Burks owns none of these warrants. • Foreman has convertible bonds payable that paid interest of $46,000 (after taxes) during the year. These bonds can be…Parent and its 80% owned Subsidiary report the following at December 31 of the current year: Parent Net Income, P100,000; Parent Dividends, P20,000, Parent Land, P500,000. Subsidiary Net Income, P80,000; Subsidiary Dividends, P10,000; Subsidiary Land, P300,000. On June 1, of the current year, Subsidiary sold land to Parent reporting a gain on sale of P10,000. The gain is included in the net income reported by the Subsidiary. 1. Determine the equity holders of parent’s net income and the non-controlling interest net income. 2. Determine the non-controlling interest net income.
- The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company: Burks ForemanRevenues . . . . $(430,000) $(330,000)Expenses . . . . . 280,000 240,000Gain on sale –0– (30,000) of equipment Equity earnings of (64,000) -0-subsidiaryNet income . . $(214,000) $(120,000)Outstanding . . . 65000 40000 Common stock Additional Information∙ Amortization expense resulting from Foreman’s excess acquisition-date fair value is $40,000 per year.∙ Burks has convertible preferred stock outstanding. Each of these 8,000 shares is paid a dividend of $4 per year. Each share can be converted into four shares of common stock.∙ Stock warrants to buy 20,000 shares of Foreman are also outstanding. For $15, each warrant can be converted into a share of Foreman’s common stock. The fair value of this stock is $20 throughout the year. Burks owns none of these…Alford Company and its 80 percent-owned subsidiary, Knight, have the following income statements for 2021: Knight $ (230,000) Alford $ (500,000) 300,000 40,000 140,000 10,000 20,000 20,000 (30,000) (36,200) $ (206, 200) Revenues Cost of goods sold Depreciation and amortization Other expenses Gain on sale of equipment Equity in earnings of Knight Net income 0 0 $ (60,000) Additional Information for 2021 • Intra-entity inventory transfers during the year amounted to $90,000. All intra-entity transfers were downstream from Alford to Knight. • Intra-entity gross profits in inventory at January 1 were $6,000, but at December 31, they are $9,000. • Annual excess amortization expense resulting from the acquisition is $11,000. • Knight paid dividends totaling $20,000. • The noncontrolling interest's share of the subsidiary's income is $9,800. . During the year, consolidated inventory rose by $11,000 while accounts receivable and accounts payable declined by $8,000 and $6,000, respectively. Net…On January 1, 2021, WATER Corporation purchased 80% of the control of FIRE Corporation. The separate financial statements on the date of business combination showed the following: Current Assets Land Plant Assets Accumulated Depreciation Investment in Subsidiary TOTALS Accounts Payable Ordinary Share Capital Retained Earnings TOTALS WATER 210,000 31,200 280,000 (96,000) 286,500 711,700 102,400 419,700 189,600 711,700 FIRE 65,000 108,000 210,000 (24,000) 359,000 57,000 162,000 140,000 359,000 On the date of acquisition, the net assets of FIRE are fairly valued except for receivables that should be written down by P6,500. The NCI is measured at their proportionate share on the fair value of FIRE's net assets. Determine the amount of Goodwill to be recognized in the consolidated balance sheet at the date of acquisition.
- Tali Co. Acquired 80% of Wind Corp.'s voting rights. The statements of financial position of both entities immediately after the acquisition are shown below: Tali Co. Wind Corp. Investment in Subsidiary (cost) Other Assets Assets 430,000 1,570,000 2,000,000 750,000 750,000 400,000 310,000 40,000 Liabilities 750,000 1,000,000 Ordinary Share Capital Retained Earnings Liabilities and Stockholders' Equity 250,000 2,000,000 750,000 The fair value of Winds' assets is P50,000 more than the aggregate carrying amounts. Non-controlling interest is measured under the proportionate share method. How much is the consolidated total equity?1. Parent and its 80% owned Subsidiary report the following at December 31 of the current year: Parent Net Income, P100,000; Parent Dividends, P20,000, Parent Land, P500,000. Subsidiary Net Income, P80,000; Subsidiary Dividends, P10,000; Subsidiary Land, P300,000. On June 1, of the current year, Subsidiary sold land to Parent reporting a gain on sale of P10,000. The gain is included in the net income reported by the Subsidiary. Determine the valuation of Land in the consolidated balance sheet. 2. Parent and its 80% owned Subsidiary report the following at December 31 of the current year: Parent Net Income, P100,000; Parent Dividends, P20,000, Parent Land, P500,000. Subsidiary Net Income, P80,000; Subsidiary Dividends, P10,000; Subsidiary Land, P300,000. On June 1, of the current year, Subsidiary sold land to Parent reporting a gain on sale of P10,000. The gain is included in the net income reported by the Subsidiary. Determine the equity holders of parent’s net income. 3. Parent and…On January 1, 2018, Parent Co. acquired 80% of the ordinary shares of Subsidiary Co. for P1,000,000. At the time of acquisition, Subsidiary's Ordinary shares, share premium and retained earnings were P100,000, P400,000 and P500,000 respectively. The identifiable assets and liabilities of the Subsidiary were fairly valued. The assets of the Subsidiary included goodwill of P50,000. The following income statement data were prepared by Parent and Subsidiary on December 31, 2019: Parent Subsidiary 400,000 750,000 50,000 15,000 150,000 300,000 150,000 50,000 Sales Other income Cost of goods sold Operating expenses During 2019, the Subsidiary declared dividends of P50,000. The dividend received by the parent was recorded as part of dividend income (included in other income). On January 1, 2019, Parent purchaseda machine from the subsidiary for P40,000. This was carried at Subsidiary's books at P25,000. The remaining life of the machine was 5 years. Since the purchase date, Subsidiary Co.…
- Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 35,000 shares of $7 par value common stock. The following information is provided on the assets and accounts payable transferred: Cost Book Value Fair Value Cash $ 32,000 $ 32,000 $ 32,000 Inventory 83,000 83,000 83,000 Land 69,000 69,000 99,000 Buildings 188,000 147,000 249,000 Equipment 95,000 74,000 123,000 Accounts Payable 58,000 58,000 58,000 Required: Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon Prepare the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab.Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 34,000 shares of $6 par value common stock. The following Information is provided on the assets and accounts payable transferred: Cash Inventory Land Buildings Equipment Accounts Payable Required: Cost $ 30,000 84,000 Book Value $ 30,000 Fair Value $ 30,000 84,000 84,000 71,000 71,000 101,000 175,000 141,000 242,000 98,000 71,000 114,000 59,000 59,000 59,000 a. Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon b. Prepare the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon. Note: If no entry is required for a…The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares each valued at $1.50. The summary statement of the financial position of the subsidiary company immediately following the acquisition is: Fair value of assets acquired $2,640,000 Fair value of liabilities acquired $720,000 Total shareholders’ equity of the subsidiary company $800,000 Retained earnings of the subsidiary company $1,120,000 Required: a) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition b) Pass the necessary consolidation entry to eliminate the subsidiary by the parent company c) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchase consideration paid was $1,000,000 cash and 400,000 shares each valued at $1.50