How much share premium must be reallocated by Pe Inc. due to the dilution to its ownership interest over So Corp.?
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In January 1, 2021, Pe Inc. purchased So Corp.’s 61,200 shared of P6,000,000. This represents a 61.2% ownership of Pe Inc. and So Corp. The net assets of So Corp. was P8,000,000 in the consolidated balance sheet as of December 31, 2023. After much deliberation, on January 1, 2024, So Corp. issues an additional 20,000 shares to unrelated parties for P2,500,00. How much share premium must be reallocated by Pe Inc. due to the dilution to its ownership interest over So Corp.?
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- ABC and XYZ Inc had the following balance sheets on December 31, 2021: (see image below) On January 1, 2022 ABC purchased all of XYZ Inc’s Common Shares for P40,000 in cash. On that date, XYZ’s Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, 1) Determine the value of the current assets of the combined entity? 2) how much is the Goodwill arising from this Business Combination? 3) how much is the Shareholder’s Equity section of the Consolidated Balance Sheet?On January 1, 2021, Arneyow Company acquired 10% of the outstanding voting shares of Pee Yu Pi Incorporated for P900,000. These shares were designated as equity investments at fair value through other comprehensive income. On January 1, 2022, Arneyow gained the ability to exercise significant influence over financial and operating policies of Pee Yu Pi by acquiring additional 20% of the outstanding shares for P2,760,000. The two purchases were made at prices proportionate to the value assigned to Pee Yu Pi's net assets, which is equal to their carrying amounts. For the years ended December 31, 2021 and 2022, Pee Yu Pi reported the following: 2021 2022 Dividends paid P2,000,000 P3,000,000 Profit for the year P 6,000,000 P 6,500,000 The fair values of the investments on December 31, 2021 and 2022 were P1,380,000 and P5,160,000, respectively. The carrying value of the investment in associate at the end of 2022 is?On December 31, 2020, GHI Corporation holds 50,000 shares of Harry Company with market value of P6,300,000 and originally acquired at a total amount of P5,900,000. The investment is classified as fair value through other comprehensive income. On March 1, 2021, a 3-for-2 stock split was completed by Harry Company. On September 30, 2021, GHI Corp. sold 21,000 shares of Harry Company for its fair value of P73/share. On December 31, 2021, a share of Harry Company has a fair value of P75/share. What is the balance of Unrealized Gain or Loss - Other Comprehensive Income to be transferred to Retained Earnings the sale of the investment on September 30, 2021? (Indicate if debit or credit) 3.
- At the beginning of 2019, Enif Co. purchased 100,000 of Cetus Co.'s ordinary shares for P3,000,000. The entity designated the investment as financial asset at fair value through profit or loss. On June 30, 2019, Cetus declared a P1.50 cash dividend to all of its shareholders of record as of July 31, to be distributed on August 31. On September 15, Enif sold 20,000 shares of its investment in Cetus, receiving P650,000. At the end of 2019, Cetus's shares had a fair value of P31 per share. Suppose that instead of declaring cash dividends, Cetus declared a 20% share dividend. Prepare the necessary journal entries on the books of Enif.On January 1, 2021, KORU Co. issued shares of its $5 par value share capital to acquire all the net assets of PATRICH Company, which was liquidated immediately thereafter. Cost of issuing equity instruments amounting to $5,000 were incurred and paid by KORU Co., aside from the indirect acquisition costs amounting $3,000. The Statement of Financial Position for KORU Co. and the Statement of Financial for the combined company under the purchase method are presented below. KORU Co. Combined KORU Co. Combined Cash 70,000 100,000 Accounts Payable 40,000 60,000 Accounts Receivable 130,000 180,000 Bonds Payable 100,000 160,000 Inventory 100,000 220,000 Ordinary Share Capital 200,000 240,000 Land 100,000 175,000 Share Premium 60,000 420,000 Buildings and Equipment 400,000 550,000 Retained Earnings 250,000 247,000 Accumulated Depreciation 150,000 150,000 Goodwill - 52,000 Shortly after the above information was compiled, a fire destroyed the accounting…On January 1, 2021, CBA acquires 60% of outstanding ordinary shares of LPU at a gain on bargain purchaseof P40,000. For the year ended December 31, 2022, CBA and LPU reported sales revenue of P2,000,000and P1,000,000 in their respective separate income statements. At the same year, CBA and LPU reportedcost of sales of P1,200,000 and P700,000 in their respective separate income statements.During 2021, CBA sold inventory to LPU at a selling price of P280,000 with gross profit rate of 40%based on cost. On the other hand, LPU sold inventory to CBA at a selling price of P400,000 with grossprofit rate of 30% based on sales during 2022.On December 31, 2021, ¼ of the goods coming from CBA remained in LPU’s inventory but all wereeventually sold to third persons during 2022. As of December 31, 2022, 2/5 of the goods coming from LPUwere eventually sold to third persons. For the year ended December 31, 2022, CBA reported net income ofP500,000 while LPU reported net income of P200,000 and…
- On January 1, 2021, Grey Co. Acquires 80% of the outstanding voting shares of Cristine Corp. Cristine Corp.'s identifiable assets and liabilities have fair values of P3,400,000 and P1,700,000, respectively. Relevant information follows: Grey Co. Agrees to pay Cristine's former owners P2,000,000 cash, half of which is to be paid on January 1, 2021, while the other half will be paid in five equal annual installments starting December31, 2021. The current market rate of interest on January 1, 2021 is 12% > Grey Co. Also agrees to provide a technical know-how to be used in Cristine's operations after the business combination. The technical know-how has a fair value of P200,000 Grey Co. Opts to measure the non-controlling interest at the NCI's proportionate share in Cristine's net identifiable assets Compute the goodwill (gain on bargain purchase).Sky Ltd acquired all the issued shares of Jupiter Ltd on 1 January 2019. The following transactions occurred between the two entities: • On 1 June 2020, Sky Ltd sold inventory to Jupiter Ltd for $12 000; By 30 June 2020, Jupiter Ltd had sold 20% of this inventory to other entities for $3000. The other 80% was all sold to external entities by 30 June 2021 for $13 000. . During the 2020-21 period, Jupiter Ltd sold inventory to Sky Ltd for $6000 at cost plus 20% markup. Of this inventory, 20% remained on hand in Sky Ltd at 30 June 2021. The tax rate is 30%. Required: Prepare the consolidation worksheet entries for Sky Ltd at 30 June 2021 concerning the intragroup inventory transfers.Sky Ltd acquired all the issued shares of Jupiter Ltd on 1 January 2019. The following transactions occurred between the two entities: • On 1 June 2020, Sky Ltd sold inventory to Jupiter Ltd for $12 000; By 30 June 2020, Jupiter Ltd had sold 20% of this inventory to other entities for $3000. The other 80% was all sold to external entities by 30 June 2021 for $13 000. • During the 2020–21 period, Jupiter Ltd sold inventory to Sky Ltd for $6000 at cost plus 20% markup. Of this inventory, 20% remained on hand in Sky Ltd at 30 June 2021. The tax rate is 30%. Required: a) Prepare the consolidation worksheet entries for Sky Ltd at 30 June 2021 concerning the intragroup inventory transfers. b) Compute the cost of goods sold to be reported in the consolidated income statement for 2021 relating to this intra-group sale. Please avoid solutions in an image based thanku
- P Corporation purchased 60% of the shares of S Corporation on January 01, 2019 for P2,200,000. On that date, S Corp. reported retained earnings of P1,000,000 and had P2,000,000 of shares outstanding. P’s retained earnings was P4,000,000 at acquisition. P accounts for its investment in S under the cost method. The companies recorded the following results for 2019 & 2020: P Corporation S Corporation 2019: Net Income P700,000 P350,000 Dividends Paid 250,000 300,000 2020: Net Income 900,000 400,000 Dividends Paid 300,000 150,000 What amount of…On January 2, 2021, Normal Inc. acquired 15% interest in Laco Co. by paying P1,500,000 for 7,500 ordinary shares. On this date, the net assets of Laco Co. totaled P9 million. The investment was classified as a financial asset at fair value through other comprehensive income. The fair values of Laco Co.’s identifiable assets and liabilities approximate their book values. On August 1, 2021, Normal received dividends of P4 per share from Laco Co. Fair value of the stocks on December 31, 2021 was P190. Net income reported by Laco for the year ended amounted to P1,500,000. On July 1, 2022, Normal Inc. paid P1 million to purchase 5,000 additional shares of Laco Co. from another shareholder. On this date the fair value of the net assets exceeds carrying value by P500,000 attributable to depreciable asset with estimated remaining life of 5 years. On February 1, 2022, cash dividends of P5 were received while dividends of P6 were received on August 1, 2022. Net income reported for the year ended…On 1 July 2021, King Ltd acquired all the share capital of Queen Ltd for $1,800,000, and on that date Queen Ltd.'s equity were as follows: Share capital $1,200,000; Revaluation surplus $500,000 and Retained earnings $200,000. All the assets and liabilities of Queen Ltd. were recorded at fair value on 1 July 2021. During the financial year 2022, the following intragroup transactions occurred between King Ltd and Queen Ltd: Queen Ltd sold land to King Ltd for $400,000, which was $100,000 above cost. The land was still hold by King Ltd. King Ltd sold an equipment to Queen Ltd for $400,000. The carrying amount of equipment to King Ltd of $320,000. Both entities depreciate equipment at a rate of 10% p.a. on cost. Queen Ltd sold inventories costing $160,000 to King Ltd for $180,000. 1/4th of the inventories were still on hand with King Ltd. King Ltd received $15,000 of service revenue from Queen Ltd. Queen Ltd paid dividend of $30,000 and interest on loan of $8,000 to King Ltd. The tax rate…