On August 1, ABC Company acquired a real property for P 4,420,000. The shares were selling on the same date at P 125. The fair values are P 800,000 and P 3,200,000 for the land and building respectively. A mortgage of P 4,000,000 was assumed by ABC on the purchase. Moreover, the company paid P 180,000 of real property taxes in the prior years. ABC paid legal fees including title search for P 15,000. ABC also paid the local government special assessment for city improvement amounting to P 120,000. In order to make the building suitable for the use of ABC, remodeling costs had to be incurred in the amount of P 900,000. This however, necessitated the demolition of a portion of the building, which resulted in recovery of salvage material sold for P 30,000. Parking lot cost the company, P 320,000 while repairs in the main hall were incurred at P45,000 prior to its use. QUESTION: What is the correct cost of the land? P1,720,000 P2,535,000 P1,855,000 P1,799,000

On January 2, Year 1 Parent Company paid $1,200,000 for 100% of the voting common stock of Sub Corp. At the time of the investment, Sub Corp had net assets with a book value of $800,000 and fair value of $1,000,000. The fair value increase is attributable to the building and will be amortized over 10 years. During year 1, Sub earned net income of $100,000 and paid dividends of $20,000. Any excess cost over fair value is attributable to goodwill with an indefinite life. What is the amount of goodwill from Parent's investment in Sub? O $200,000 O $400,000 O $1,200,000 O $20,000 QUESTION 2 What is the balance in Parent's investment account at December 31, Year 1? O $1,260,000 O $1,200,000 O $1,340,000 O $1,280,000

Pillow Corporation acquired 80 percent ownership of Sheet Company on January 1, 20X7, for $173,000. At that date, the fair value of the noncontrolling interest was $43,250. The trial balances for the two companies on December 31, 20X7, included the following amounts: Item Cash Accounts Receivable Inventory Land Buildings and Equipment. Investment in Sheet Company Cost of Goods Sold Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Mortgages Payable Common Stock Retained Earnings Sales Income from Sheet Company Pillow Corporation Debit $ 38,000 50,000 240,000 80,000 500,000 202,000 500,000 25,000 75,000 50,000 view darpadort Hot $ 1,760,000 Credit $ 155,000 70,000 200,000 300,000 290,000 700,000 45,000 $ 1,760,000 wandeosoITIOL Sheet Company Record the basic consolidation entry. Debit $ 25,000 55,000 100,000 20,000 150,000 250,000 15,000 75,000 20,000 $ 710,000 Credit Additional Information 1. On January 1, 20X7, Sheet reported Buildings…

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