On January 1, 2020, Churl Company paid $1,700,000 for a 40% stake in Flip Company. The Flip Company's stockholders equity on January 1 and December 31, 2020 is shown below: Share capital Revaluation surplus Retained earnings January 1 3,000,000 1,000,000 December 31 3,000,000 1,300,000 1,500,000 By Jan 1, 2020, all of Flip's identified assets and liabilities were recognized at fair value. During the current fiscal year, the flip firm recorded a profit before income tax of 1,000,000 and paid dividends to stockholders of 150,000. The revaluation excess is the outcome of Flip Company's land reassessment on December 31, 2020. Flip displays OCI net of any relevant income tax. Furthermore, Flip Company provides depreciation using the declining balance approach, whereas Churl Company employs a straight line. The cumulative depreciation would have been enhanced by 200,000 if Flip Company had used the straight line. The tax rate is set at 35%. On December 31, 2020, Churl| Company will report its investment in associate at?

On January 1, 2020, Churl Company paid $1,700,000 for a 40% stake in Flip Company. The Flip Company's stockholders equity on January 1 and December 31, 2020 is shown below: Share capital Revaluation surplus Retained earnings January 1 3,000,000 1,000,000 December 31 3,000,000 1,300,000 1,500,000 By Jan 1, 2020, all of Flip's identified assets and liabilities were recognized at fair value. During the current fiscal year, the flip firm recorded a profit before income tax of 1,000,000 and paid dividends to stockholders of 150,000. The revaluation excess is the outcome of Flip Company's land reassessment on December 31, 2020. Flip displays OCI net of any relevant income tax. Furthermore, Flip Company provides depreciation using the declining balance approach, whereas Churl Company employs a straight line. The cumulative depreciation would have been enhanced by 200,000 if Flip Company had used the straight line. The tax rate is set at 35%. On December 31, 2020, Churl| Company will report its investment in associate at?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On May 1, 2020, Clarke Inc. acquired 1,250 shares of Mayson Ltd. for $75,000. This investment represents a 16% interest in Mayson Ltd. and Clark Inc. has significant influence. On December 31, 2020, Mayon Ltd. paid a $35,000 dividend to its shareholders. At April 30, 2021 Mayson Ltd.'s shares were valued at $30 per share and Mayson Ltd. reported net income of $27,000 for the year. On June 15, 2021, Clarke Inc. sold the shares for $37,000. Both Clarke Inc. and Mayson Ltd. have April 30, 2021 year-ends. Prepare dated journal entries for the investment on the acquiring company's books and from acquisition to disposal. Ignore income taxes. Journal entry descriptions are optional.
4. On January 2, 2020, Pare Co. purchased 75% of Kidd Co.'s outstanding common stock. Selected balance sheet data at December 31,2020 is as follows: Pare Kidd Total assets 420,000 180,000 Liabilities 120,000 60,000 Common stock 100,000 50,000 Retained earnings 200,000 70,000 Total 420,000 180,000 During 2009, Pare and Kidd paid cash dividends of P25,000 and P5,000, respectively, to their stockholders. There were no other intercompany transactions. a. In its December 31, 2020 consolidated statement of retained earnings, what amount should Pare report as dividends paid? b. In Pare's December 31, 2020 consolidated balance sheet, what amount should be reported as minority interest in net assets?
MCG Company's adjusted trial balance at December 31, 2021, includes the following: Ordinary share capital, P5 par P360,000 Share premium 480,000 Treasury shares, at cost 30,000 Cumulative net unrealized loss on equity securities at fair value through other comprehensive income 12,000 Retained appropriated for contingencies 90,000 Unappropriated retained earnings 120,000 What amount should MCG report as total shareholders' equity in its Deember 31, 2021 statement of financial position? (A) P1,068,000 B P1,008,000 (c) P1,032,000 D) P1,092,000
Revenues and operating (marketing and administrative) expenses for the year 2021 are P7,500,000 and P4,000,000 respectively. How much is the change in Retained Earnings for the year 2021 due to the equity securities indicate whether increase or decrease?
Oriole, Inc. had the following equity investment portfolio at January 1, 2020. Evers Company 960 shares @ $ 14 each $ 13,440 Rogers Company 880 shares @ $ 20 each 17,600 Chance Company 520 shares @ $ 10 each 5,200 Equity investments @ cost 36,240 Fair value adjustment ( 7,300 ) Equity investments @ fair value $ 28,940 During 2020, the following transactions took place. 1. On March 1, Rogers Company paid a $ 2 per share dividend. 2. On April 30, Oriole, Inc. sold 320 shares of Chance Company for $ 11 per share. 3. On May 15, Oriole, Inc. purchased 100 more shares of Evers Company stock at $ 17 per share. 4. At December 31, 2020, the stocks had the following price per share values: Evers $ 18, Rogers $ 19, and Chance $ 9. During 2021, the following transactions took place. 5. On February 1, Oriole, Inc. sold the remaining Chance shares for $ 9 per share. 6. On March 1, Rogers Company paid a $ 2…
During 2019, Moore Corporation paid $20,000 of dividends. Moore's assets, liabilities, and common stock at the end of 2018 and 2019 were: 12/31/2018 12/31/2019 Total assets $152,200 $171,800 Total liabilities 56,600 63,750 Common shares 60,000 60,000 Required: Using the information provided, compute Moore's net income for 2019.
On January 1, 2020 Prateroon Company purchased all the net assets of Stranemon Company consisting of: > Issuance of 20,000 unissued shares of its P10 par value ordinary share capital. As of this date, the shares of Prateroon were selling at P40 per share. > Issuance of bonds with a face value of P300,000 but are currently at 110. > A contingent payment of P200,000 cash on January 1, 2020, if the average income of Stranemon Company during the two-year period (2020-2021) exceeds P250,000 per year. Prateroon estimates that there is a 20% chance or probability that the P200,000 payment will be required. > Issuance of 5,000 additional shares on January 1, 2022 to the former shareholders of Stranemon Company if the average income cover the next two years (2020-2021) equalled or exceeded P350,000. The additional 5,000 shares expected to be issued are valued at P75,000. Professional fees of P9,000 were also paid by Prateroon to its external auditors to finalize the business combination. As of…
Flounder Corp. has the following portfolio of securities acquired for trading purposes and accounted for using the FV-NI model at September 30, 2023, the end of the company's third quarter: Investment Cost Fair Value 47,500 common shares of Yuen Inc. $266,000 $190,000 3,200 preferred shares of Monty Ltd. 121,600 128,000 1,350 common shares of Oakwood Inc. 121,500 120,825 On October 8, 2023, the Yuen shares were sold for $5.60 per share. On November 16, 2023, 3,000 common shares of Patriot Corp. were purchased at $43.80 per share. Flounder pays a 1% commission on purchases and sales of all securities. At the end of the fourth quarter, on December 31, 2023, the fair values of the shares held were as follows: Monty $102,050; Patriot $116,750; and Oakwood $137,025. Flounder prepares financial statements every quarter. (a) Your answer is partially correct. Prepare the journal entries to record the sale, purchase, and adjusting entries related to the portfolio for the fourth quarter of 2023.…
Please answer in good accounting form. Thankyou What is the retained earnings balance ending December 31, 2021?
The Shareholders’ Equity of Purple Corporation showed the following: Ordinary Share capital, P 10 par, 900,000 shares issued P9,000,000; Ordinary Share Premium P2,700,000; Retained Earnings P1,300,000. On January 2, 2019, the corporation purchased and retired 100,000 shares of its share capital for P 1,800,000. In preparing the journal entry for this transaction, is there an indicated gain or indicated loss?Using the data, how much is the indicated gain (loss)? If your answer is an indicated loss, put a parenthesis. Using the data, how much will be credited to Cash? Using the data, how much will be debited to Ordinary Share Premium??
At December 31, 2020 year-end, Lapwing Corporation's investment in Ground Inc. was $200,000 consisting of 80% of Ground's $250,000 stockholders' equity on that date. On April 1, 2021, Lapwing sold 20% interest (one-fourth of its holdings) in Ground for $65,000. During 2021, Ground had net income of $75,000 (earned uniformly) and on July 1, 2021, Ground paid dividends of $40,000. Lapwing uses the equity method to account for the investment. Required: 1. What is the gain or loss on sale of the 20% interest? 2. Record the journal entries for Lapwing for the year ending December 31.
For the year ended December 31, 2021, Norstar Industries reported net income of $655,000. At January 1, 2021, the company had 900,000 common shares outstanding. The following changes in the number of shares occurred during 2021: Apr. 30 Sold 60,000 shares in a public offeringMay 24 Declared and distributed a 5% stock dividendJune 1 Issued 72,000 shares as part of the consideration for the purchase of assets from a subsidiary Required:Compute Norstar’s earnings per share for the year ended December 31, 2021.