Judd Company issued nonvoting preferred stock with a fair value of P1,500,000 in exchange for all the outstanding common stock of the Bath Corporation. On the date of the exchange, Bath had tangible net assets with a book value of P900,000 and a fair value of P1,400,000. In addition, Judd issued preferred stock valued at P100,000 to an individual as a finder's fee for arranging the transaction.As a result of these transactions, Judd should report an increase in net assets of as a result of debiting the account "investment in Subsidiary":
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- S&L Financial typically classifies equity investments as fair value through other comprehensive invome under the irrevucable uption permiued by IFRS 9. On Devember 27, 2022, S&L purchased Amber Company sharcs for $875,000 and sold the sharcs on January 3, 2023, for S880,000. At December 31, the shares had a fair value of $873,000. What pretax amounts did S&L include in its 2022 and 2023 other comprehensive income as a result of this investment?On January 1, 20x4, the Alpha Company entered into a transaction for acquisition of assets and liabilities of Beta Company. Alpha issued P400 in long-term liabilities and 40 shares of ordinary shares having a par value of P1 per share but a fair value of P10 per share. Alpha paid P20 to lawyers, accountants and brokers for assistance in bringing about this purchase. Another P15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Item.. ..Alpha .Beta Cash.. P 180 ..P 40 Accounts Receivable...... 810..180 Inventory... 1,080.. 280 Land. . 600.. 360 Buildings (net).. .1,260.. 440 Equipment (net).. 480... 100 .....- Accounts Payable........( 450)..( 80) Long-term liabilities......(1,290)..( 400) Ordinary Shares, P1 par....( 330) Ordinary Shares, P20 par .( 240) Share Premium.. ( 1,080)..( 340) Retained Earnings.......(1,260).. ( 340) Note: Parentheses indicate a credit balance.On September 1, FAITH Inc issued 120,000 shares of its P50 par value ordinary share in exchange for land. On the date of the transaction, the fair value of the ordinary shares, evidenced by its quoted market price in the stock exchange, was P120 per share. The fair value of the land on the same date was valued at P10,000,000. The journal entry to record this transaction includes a debit to Land for how much?
- On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltdissued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of EldoradoLtd. The costs of issuing the shares by Quick Buck Ltd cost $1,600.At this date the statement of financial position of Eldorado Ltd was as follows: c Carrying amount Fair valueMachinery $40,000 $67,000Fixtures & fittings 60,000 68,000Vehicles 35,000 35,000 Current assets 10,000 12,000Current liabilities (16,000) (18,000)Total net assets…On December 1, 2019, PT ABC exchanged 20.000 shares of its Rp10 par value ordinary shares held in treasury for a used machine. The treasury shares were acquired by ABC at a cost of Rp40 per share, and are accounted for under the cost method. On the date of the exchange, the ordinary shares had a fair value of Rp55 per share (the shares were originally issued at Rp30 per share). As a result of this exchange, ABC's total equity will increase by: * Rp900.000. O Rp800.000. Rp200.000. Rp1.100.000.On july 16, 2021, Empe exchanged a land for 15,000 ordinary shares of RH corporation to be held for trading. On this date, the carrying amount of the land was P1,200,000 and the fair value was P1,650,000. On this date, the carrying amount of RH's share was P75 and the market value was P125. On October 17, 10,000 of these share were sold at P135. The market price at year end is P142. The entry made by your client with regards to the above investment upon acquisition was: DEBIT: Trading securities-RH-P1,200,000 CREDIT: Land-P1,200,000 Upon sale: DEBIT: Cash-P1,350,000 CREDIT: Trading securities-P1,350,000 What amount should be presented in the statement of financial position on December 31, 2021 for the investment related to RH? Compute the unrealized gain or loss that should be reported in the income statement at yearend. ( If loss, put a negative (-) sign before the numerical figure)
- On 1 July 2023, Supplyco Ltd provides Grove Ltd with some inventory, which has a fair value of $200 000. In exchange for the inventory, Grove Ltd provides Supplyco Ltd with 20 000 shares in Grove Ltd. REQUIRED Provide the accounting entry to account for the above equity-settled share-based transaction.P Company acquired the net assets of S Company by issuing 150,000 shares of its P10 par value ordinary share capital on July 1, 2021. The market value of the shares was P12. P also paid direct costs of P100,000 which includes P15,000 cost of issuing and registering new shares. The financial statements of P and S were (see image below). The fair value and book value of S Company's identifiable assets and liabilities were the same except Equipment which was undervalued by P250.000 and lInventory which was overvalued by P100,000. Assuming that P Company is an SME. How much is the goodwill/gain on bargain purchase? " P S Cash Inventory Equipment Other Assets 150,000 320,000 4,350,000 500,000 5,320,000 120,000 400,000 1,750,000 500,000 2,770,000 Total Accounts Payable Notes Payable Share Capital, P10 par 1,000,000 1,300,000 2,000,000 1,000,000 20,000 5,320,000 300,000 660,000 500,000 100,000 1,210,000 2,770,000 Share Premium Retained Earnings TotalOn January 1, 2021, an entity purchased marketable equity securities for P5,000,000. The equity securities did not qualify as a financial asset held for trading, and the entity made an irrevocable election to present unrealized gain and loss in other comprehensive income. The entity also paid P50,000 as commission to the broker. The entry to record this purchase would include a.A debit to commission expense, P50,000 b.A debit to Financial asset - FVOCI, P5,000,000 c.A debit to Financial asset - FVOCI, P4,950,000 d.A debit to Financial asset - FVOCI, P5,050,000
- P Company acquired all the outstanding shares of S Company by issuing 50,000 shares with a par value of P100 on July 1, 2021. P's ordinary shares were selling at P102 per share at the date of acquisition. On the same date, the net asset of S had a carrying value and fair value of P3,800,000 and P4,500,000 respectively. Out of pocket expenses of the business combination were as follows (see image below). How much is the amount charged to expense? Legal fees for contract of business combination Audit fees for SEC registration of share issue Brokerage fee Accountant fee for pre-acquisition audit Printing and registration of stock certificates Other direct costs of acquisition 41,200 50,000 22,500 35,000 10,000 16,800 General administrative costs 25,000 12,100 Listing fees in issuing new sharesOn 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…CARBS Company merged into CREATIN Company on July 1, 2021. In exchange for the net assets at fair market value of CARBS Company amounting to P696,450, CREATIN, issued 68,000 ordinary shares at P9 par value with a market price of P12 per share. Out-of-pockets of the combination were as follows: Legal fees for the contract of business combination P35,600; Audit fee for SEC registration of stock issue P90,000; Printing costs of stock certificates P14,500; Broker’s fee P23,600; Accountant’s fee for pre-acquisition P80,000; Other indirect cost of acquisition P75,000; General and allocated expenses P43,000 and Listing fees in issuing new shares P36,000. CARBS will pay an additional cash consideration of P455,000 in the event that CREATIN’s net income will be equal or greater than P950,000 for the period ended December 31, 2021. At acquisition date, there is a high probability of reaching the target net income and the fair value of the additional consideration was determined to be P195,000.…