On January 1, 2019, Jones Company acquires a 30% interest in Fink Company by purchasing 3,000 of its 10,000 common shares for $16 per share and obtains significant influence. On the date of acquisition, the net assets of Fink were as shown here:   Book Value Fair Value Non-depreciable assets (for example, land) $15,000 $25,000 Depreciable assets (10-year remaining life) 90,000 115,000   $105,000 $140,000 Liabilities $10,000 $15,000   During 2019, Fink earned income of $22,000 and paid dividends of $6,000. Required:   Prepare all journal entries on Jones’s books to record the acquisition, dividends, and income from the investment in Fink.

CPA corporation purchased a 10% interest in ABC co. on January 1, 2021 as an available for sale investment for a price of P120,000. On January 1, 2022, CPA purchase 7,000 additional shares of ABC from existing stockholders for P945,000. This purchase increased CPA's interest to 70%. ABC had the following statement of financial position just prior to the second purchase. Current Assets 495,000 Building, Net Equipment, Net 420,000 300,000 Liabilities 195,000 Common Stock, P30 par Retained Earnings 300,000 720,000 On the date of second purchase, CPA determines that the equipment was understated by 150,000 and had a remaining life of 5yrs. All other book values approximate their fair values. Any remaining excess is attributed to goodwill. On January 1, 2022 consolidated financial position, what is the amount of goodwill to be reported?

On 1 July 2019, Besar Ltd acquired all of the shares (cum div.) of Kecil Ltd. The statement of financial position provided by the two companies at 1 July 2019 is as follows:   Besar Ltd Kecil Ltd     Shares in Kecil Ltd 367,000 -     Plant 230,000 320,000     Accumulated depreciation (120,000) (40,000)     Land - 12,000     Goodwill 10,200 2,000     Inventory 30,000 51,000     Receivables 40,000 42,000       557,200 387,000     Share capital 280,000 200,000     General reserve 44,000 33,000     Retained earnings 131,200 134,000     Liabilities 102,000 20,000       557,200 387,000     At the date of the business combination, all the identifiable assets and liabilities of Kecil Ltd had carrying amounts equal to their fair values except for:   Fair value Plant $300,000 Inventory 31,000 Receivables 43,000 The plant had a further useful life of 5 years. It…

6. On December 31, 2019, Stefan company purchased for 30 per share all 300,000 of Elena company’s outstanding ordinary shares. On this date, the acquiree’s statement of financial position showed net assets of P7,500,000. Additionally, the fair value of the acquiree’s identifiable assets on this date was 600,000 in excess of carrying amount. In the statement of financial position, what amount should be reported as goodwill as a result ofthe acquisition?

On 1 July 2019, Frankie Ltd acquired 80% of the issued shares of Sinatra Ltd for $250,000. At that date, Sinatra Ltd's equity consisted of share capital of $200,000 and retained earnings of $300,000. At acquisition date, all identifiable net assets of Sinatra Ltd were recorded at amounts equal to fair value. At 1 July 2019, the fair value of the non-controlling interest was $50,000. Required: (a) Calculate goodwill using the partial goodwill method. (b) Explain the reason why an adjustment is required to the NCI share of profit, for a non-current asset revalued to fair value at acquisition date.

On January 1, 2019, Monica Company acquired 80 percent of Young Company's outstanding common stock for $744,000. The fair value of the noncontrolling interest at the acquisition date was $186,000. Young reported stockholders' equity accounts on that date as follows: Common stock-$10 par value Additional paid-in capital Retained earnings In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $90,000. Any remaining excess acquisition-date fair value was allocated to a franchise agreement to be amortized over 10 years. $ 300,000 50,000 450,000 During the subsequent years, Young sold Monica inventory at a 20 percent gross profit rate. Monica consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the three years after this business combination was created amounted to the following: Year 2019 2020 2021 Transfer…

Goodwill arising

On March 31, 2018, Elf Hotels purchased Reindeers and Riders Company for $6,000,000. Reindeers reported the following balance sheet on the date of the acquisition:

Choco, Inc. acquires 15% of Cake Corporation on January 1, 2020, for $130,000 when the book value of Cake’s net assets was $760,000.  During 2020 Cake reported net income of $150,000 and paid dividends of $32,000.  Cake has a land that are undervalued by $30,000 in January 1, 2020.  On January 1, 2021, Choco purchased an additional 30% of Cake for $280,000, giving Choco the ability to significantly influence the operating policies of Cake.  During 2021, Cake reported net income of $180,000 and paid dividends of $32,000.  Cake’s land was undervalued by $32,000 in January 1, 2021.  Any excess of cost over book value is attributable to Trademark which has a useful life of 8 years in January 1, 2020. During 2020 and 2021, there was no fair value adjustment for Cake (there was no changes in fair value). And during 2020 and 2021, there was no changes in net assets.       5) In 2021, using the equity method, what is the balance of the investment account in Cake at December 31, 2020? Show your…

Huey Company acquires 100% of the stock of Solar Corporation on January 1, 2019, for $2,400,000 cash. As of that date Solar had the following account balances: Book Value Fair value Cash $630,000 $630,000 Accounts receivable 775,000 775,000 Inventory 350,000 400,000 Building-net (10 year life) 1,000,000 900,000 Equipment-net (5 year life) 300,000 400,000 Land 600,000 900,000 Accounts Payable 125,000 125,000 Bonds Payable (Face amount $1,000,000, due 12/31/2023) 2,000,000 2,050,000 Common stock 500,000 Additional paid-in capital 250,000 Retained earnings 780,000 In 2019 and 2020, Solar had net income of $250,000 and $240,000, respectively. In addition, Solar paid dividends of $16,000 in both years. Inventory is assumed to be sold in 2019. Assume straight line amortization/ depreciation for assets and bonds payable. What amount of Solar's Bonds Payable would appear on the consolidated balance sheet at December 31, 2019? Select one: A. $2,050,000 B.$2,040,000 C. $2,000,000 D. $2,010,000