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- On July 1, 2017, Entity H acquired 25% of the shares of Oki, Inc. for P1,000,000. At the date, the equity of Oki was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Oki during 2017 to 2021: YEAR PROFIT(LOSS) 2017 P200,000 2018 (2,000,000) 2019 (2,500,000) 2020 160,000 2021 300,000 How much share of profit of assocaiate should Entity H report in its 2020 profit or loss? a.Nil b. P40,000 c. P60,000 d. P100,000On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? Group of answer choices P1,060,000 Cr. P1,035,000 Cr. No entry P40,000 Dr.On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? a. P1,035,000 Cr. b. No entry c. P40,000 Dr. d. P1,060,000 Cr.
- On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? A. No entry B. 40,000 debit C. 1,035,000 credit D. 1,060,000 creditOn July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? P1,035,000 Cr. P1,060,000 Cr. P40,000 Dr. No entry How much will the Investment in Associate account be debited/credited in 2019? P960,000 Cr. No Entry P15,000 Dr. P75,000 Dr.On January 1, 2016, Ritter Company bought 10% of the outstanding ordinary shares of Bear Construction Company for P3 million. Their book value was P8 million and the difference was attributable to the fair value of Bear's buildings exceeding book value. Bear's net income for the year ended December 31, 2016, was P10 million. During 2016, Bear declared and paid cash dividends of P2 million. The buildings have a remaining life of 10 years. The investment in Bear is to be held as Investment in equity securities designated as at fair Value through other comprehensive income. Also, Bear's net income for the year ended December 31, 2017 was P12 million and Bear declared and paid cash dividends of P2.5 million. The fair value of Ritter's investment in Bear securities is as follows: December 31, 2016, P3,200,000; December 31, 2017, P3,100,000; and December 31, 2018, P13 million. On January 2, 2018, Ritter purchased an additional 20% of Bear's stock for P5,600,000 cash when the carrying amount…
- On January 2, 2017, 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, 2017, Normal received dividends of P4 per share from Laco Co. Fair value of the shares on December 31, 2017 was P190. Net income reported by Laco for the year ended amounted to P1,500,000. On July 1, 2018, Normal Inc. paid P1 million to purchase 5,000 additional shares of Laco Co. from another shareholder. On February 1, 2018, cash dividends of P5 were received while dividends of P6 were received on August 1, 2018. Net income reported for the year ended amounted to P1,500,000 with P800,000 being earned for the six months ended December 31, 2018. 1. What amount of investment income should be reported on…On July 1, 2018, Gang purchased 10,000 shares of Lamina ordinary shares for P510,000 plus broker’s fees of P5,100. The shares represented 25% of the outstanding shares of Bibimbap has an ability to exercise significant influence over the financial and operating policies of Lamina. The acquisition cost reflected the book value of the investee’s net assets as of that date. Lamina reported a profit of P850,000 (evenly earned) for the year ended December 31, 2018. On December 31, 2018, Lamina declared and paid cash dividends of P320,000. On January 1, 2019, Gang sold one-half of the investment in Lamina for P275,000 less broker’s fees of P2,750. Lamina does not have the intention to dispose of the remaining securities in the immediate future. For the year ended December 31, 2019, Lamina reported a profit of P980,000 and declared and paid cash dividends of P450,000. Market value per share of Wings Company ordinary shares were as follows: December 31, 2018 – P55 and December 31, 2019 – P49.…On April 1, 2018, Gangnam Company purchased 25,000 ordinary shares of Psy Inc. at an amount that reflected book value as of that date. At the time of purchase, Psy Inc. had 100,000 ordinary shares outstanding. Gangnam had no ownership interest in Wings before the purchase. The first quarter statement ending March 31, 2018, of Psy Inc. had a profit of P480,000. For the year ended December 31, 2018, Psy Inc. reported a profit of P2,400,000. Psy Inc. paid Ganam dividends of P60,000 on June 1 and P80,000 on December 31, 2018. The carrying amount of the investment in Psy Inc. on December 31, 2018, is P4,840,000. What was Chicken Company’s acquisition cost of its investment in Wings Company on April 1, 2018?
- On December 31, 2016, Akron, Inc. purchased 5 Percent of Zip Company’s common shares on the open market in exchange for $16,000. On December 31, 2017, Akron, Inc., acquires an additional 25 percent of Zip Company’s outstanding common stock for $95,000.During the next two years, the following information is available for Zip Company:At December 31, 2017, Zip reports a net book value of $290,000. Akron attributed any excess of its 30 percent share of Zip’s fair over book value to its share of Zip’s franchise agreements. The franchise agreements had a remaining life of 10 years at December 31, 2017.a. Assume Akron applies the equity method to its Investment in Zip account:1. What amount of equity income should Akron report for 2018?2. On Akron’s December 31, 2018, balance sheet, what amount is reported for the Investment in Zip account?b. Assume Akron uses fair-value accounting for its Investment in Zip account:1. What amount of income from its investment in Zip should Akron report for…On January 2, 2022, Promenade Company purchased 25% of Twilight Company's ordinary shares; no goodwill resulted from the purchase. Promenade appropriately carries this investment at equity and the balance in Twilight's investment account was P3,800,000 at December 31, 2022. Twilight reported net income of P2,400,000 for the year and paid dividends amounting to P960,000 during 2022. How much did Promenade pay for its investment in Twilight?On January 2, 2016, Barney Co. acquired all of Dora's ordinary shares for $180,000. On that date, the carrying amounts of Dora's assets and liabilities is equal to their fair value of $198,000 and 48,000, respectively. On the same year, Dora paid cash dividends of $3,000. Below is the financial position and statement of income on December 31, 2016. Barney Co. Dora Co. Operating Income $60,000 $30,000 Income from Subsidiary $3,000 - Net Income 63,000 21,000 Investment in Subsidiary 180,000 - Accumulated Profits 105,000 84,000 Shareholders' Equity $393,000 $168,000 WHat is the consolidated accumulated profits?