How much is the total consideration transferred recognized as a result of the business combination?

On January 1, year 1, Suzette Company signed a franchise agreement for a period of20 years for an initial fee of 6,000,000.On the same date, the entity paid 2,000,000 which is not refundable and agreed topay the balance in four equal annual payments of 1,000,000 at each year end.No future services are required are required of the franchisor. The entity can borrowat 14% for a loan of this type.Present value of 1 at 14% for 4 periods                                             0.59Future amount of 1 at 14% for 4 periods                                          1.69Present value of an ordinary annuity of 1 at 14% for 4 periods        2.91 The agreement further provides that the franchisee shall pay a periodic fee of 5% based onthe annual gross sales. During the current year, Suzette Company realized gross sales of25,000,000 Prepare the journal entries for two years in connection with the franchise on the books of thefranchisee. Required: Determine the initial measurement of the franchise…

Placid Lake Corporation acquired 80 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2020, when Scenic had a net book value of $630,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $6,000 per year.   Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $530,000. Scenic reported net income of $340,000. Placid Lake declared $160,000 in dividends during this period; Scenic paid $63,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows:     Placid Lake Scenic Inventory $ 370,000   $ 113,000   Land   830,000     430,000   Equipment (net)   630,000     530,000       During 2020, intra-entity sales of $190,000 (original cost of $88,000) were made. Only 20 percent of this inventory was still held within the consolidated entity at the end of 2020. In 2021, $320,000 in intra-entity sales were made…

On January 1, 2021, A Company acquired a 50% interest in B for P60,000,000.  A Company already held a 20% interest which had been acquired for P20,000,000 but which was valued at P24,000,000 at January 1, 2021.  The fair value of the NCI at January 1, 2021 was P30,000,000, and the fair value of the identifiable net assets of B was P110,000,000.  How much is the goodwill to be recognized as a result of the business combination?  * a. P 0 b. P 3,000,000 c. P 4,000,000 d. P 7,000,000

On April 1, 2020, Republic Company sold equipment to its wholly owned subsidiary, Barre Corporation, for $40,000. At the time of the transfer, the asset had an original cost (to Republic) of $60,000 and accumulated depreciation of $25,000. The equipment has a five year estimated remaining life. Barre reported net income of $250,000, $270,000 and $310,000 in 2020, 2021, and 2022, respectively. Republic received dividends from Barre of $90,000, $105,000 and $120,000 for 2020, 2021, and 2022, respectively. Assume that Republic uses the cost method to account for its investment in Barre. Compute the [ADJ] consolidating entry necessary for 2021. Select one: a. $155,750 b. $205,000 c. $320,750 d. $165,000 e. $245,750 x Your answer is incorrect. The correct answer is: $155,750

31 and are shown in the table given below. The following items were overlooked when the statements were prepared: • The Year 5 gain on sale of assets resulted from the subsidiary selling equipment to the parent on September 30. The parent immediately leased the equipment back to the subsidiary at an annual rental of $13,200. This was the only intercompany rent transaction that occurred each year. The equipment had a remaining life of five years on the date of the intercompany sale. The Year 6 gain on sale of assets resulted from the January 1 sale of a building, with a remaining life of seven years, by the subsidiary to the parent. • Both gains were taxed at a rate of 40%. CONSOLIDATED INCOME STATEMENTS Year 5 $ 755,000 8,800 3,300 Miscellaneous revenues Gain on sale of assets Rental revenue Miscellaneous expenses Rental expense Depreciation expense Income tax expense Non-controlling interest Net income NCI Required: Prepare correct consolidated income statements for Years 5 and 6.…

On January 1, 2019, FFF Company acquired a 10% interest in an investee for P3,000,000. The investment was accounted for using the cost method. On January 1, 2020, the entity acquired a further 15% interest in the investee for P6,750,000. On such date, the carrying amount of the net assets of the investee was P36,000,000 and the fair value of the 10% interest was P4,500,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value exceeds carrying amount by P4,000,000. The equipment has a remaining life of 5 years. The investee reported net income of P8,000,000 for 2020 and paid cash dividend of P5,000,000 on December 31, 2020. What amount of gain on re-measurement to equity should be recognized in 2020?

Comprehensive Information concerning Valnet Corporation's intangible assets is as follows: a. On January 1, 2019, Valnet signed an agreement to operate as a franchisee of Rapid Copy Service Inc. for an initial franchise fee of $94,000. Of this amount, $26,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $17,000 each beginning January 1, 2020. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 2, 2019, of the 4 annual payments discounted at 15% (the implicit rate for a loan of this type) is $48,500. The agreement also provides that 4% of the revenue from the franchise must be paid to the franchisor annually. Valnet's revenue from the franchise for 2019 was $920,000. Valnet estimates the useful life of the franchise to be 5 years. b. Valnet incurred $63,000 of experimental and development costs in its laboratory to develop a patent, which was…