On January 1, 2021, Eoeo Company acquired 16,000 shares of Fofo Corporation for P1,500,000. Commissions paid on the acquisition amounted to P15,000. Commission paid on the acquisition amounted to P15,000. On December 31, 2021, the market value per share of Fofo Company is P90. On December 31, 2022 the market value per share of Fofo's stock increases to P110. Required: Prepare all the necessary entries on 2021 and 2022 assuming the investments is 1. Financial Assets at Fair Value through Profit or Loss 2. Financial Assets at Fair Value through other Comprehensive Income

On January 1, 2021, Eoeo Company acquired 16,000 shares of Fofo Corporation for P1,500,000. Commissions paid on the acquisition amounted to P15,000. Commission paid on the acquisition amounted to P15,000. On December 31, 2021, the market value per share of Fofo Company is P90. On December 31, 2022 the market value per share of Fofo's stock increases to P110. Required: Prepare all the necessary entries on 2021 and 2022 assuming the investments is 1. Financial Assets at Fair Value through Profit or Loss 2. Financial Assets at Fair Value through other Comprehensive Income

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

Choose the correct answer: Westlife Company acquired on July 1, 2020, 30,000 ordinary shares of Lucy Company for P40 per share. Lucy has 100,000 outstanding ordinary shares on that date. Lucy’s net income for the year ended December 31, 2020 was P2,400,000, earned evenly throughout the year. Lucy paid dividends in the amount of P800,000 to its ordinary shareholders at December 31, 2020. What amount of income from the investment should Westlife report in its 2020 income statement? Remember the shares were acquired July 1 so right over the associate starts only from July 1. P720,000 c. P240,000 P360,000 d. P120,000
Compute for the reported net income of GHI Company from its own operation, if the net income of ABC from its own operation for 2024 amounted to P157,500. Do not forget if there is any upstream and downstream.
A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P30 per share and par value of P20 per share. The financial statements of ABC Co. and XYZ, Inc. immediately after the acquisition are shown below: Jan. 1, 2021 XYZ, Inc. 10,000 АВССо. Cash 20,000 Accounts receivable 60,000 24,000 80,000 150,000 46,000 Inventory Investment in subsidiary Equipment Accumulated depreciation Total assets 400,000 100,000 (40,000) 670,000 (20,000) 160,000 Accounts payable Bonds payable Share capital 40,000 12,000 60,000 340,000 100,000 Share premium 130,000 Retained earnings Total liabilities and equity 100,000 48,000 670,000 160,000 On January 1, 2021, the fair value of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows: Carrying Fair Fair value XYZ, Inc. amounts values increment Cash 10,000 10,000 Accounts receivable 24,000 24,000 Inventory 46,000 62,000 16,000 Equipment Accumulated depreciation Accounts payable Net assets…
Fill in the blanks: On January 1, 2020 Iskrambol Company purchased 20% of lce Buko Company's ordinary shares for P3,000,000.00. During 2020, Ice Buko reported a net income of P3,500,000.00 and paid a cash dividends of P2,000,000.00 on its ordinary shares. Compute a Investment Income for 2020 The balance of "Investment in associale" as of 12.31.2020 ( Previous 23 f
On January 1, 2020, HND Industrial Products Company acquired 400,000 shares at $ 50 per share of XYZ Cables Company, which represents 20% ownership. Required Record the following transactions in the books of HND Industrial Products Company. (assuming there is significant influence and insignificant influence) (a) Record the acquisition entry done by HND Company on January 1, 2020 (b) The XYZ Cables had reported net income of $ 800,000 for the year 2020 (c) XYZ cables announced and paid cash dividends of $ 200,000, (d) On December 31, 2020, XYZ Cables shares have been valued at $ 52 per share, and HND still owns 400,000 shares On December 31, 2021, XYZ Cables shares would be valued at $ 51 per share, and HND Company will own 400,000 shares
Acquiree Inc. has 100,000 shares of P2 par value stock outstanding. Acquirer Co. purchased 30,000 shares of Acquiree on January 1, 2018 for P120,000 when Acquiree’s net assets had a fair value of P350,000. On July 1, 2020, Acquirer agreed to buy an additional 60,000 shares of Acquiree for P6 per share. Although Acquiree’s shares were selling at P5 per share, Acquirer forecasted that obtaining control of Acquiree would produce significant revenue synergies to justify the premium price paid. If Acquiree’s net identifiable assets had a fair value of P400,000 on July 1, 2020, how much partial goodwill should Acquirer report?
1. On June 30, 2021, ABC Company acquired 50,000 representing 25% ownership interest in Arthur Corporation stocks at P48 per share, including P3 per share broker's fees and commissions. Arthur Corp. declared and paid P5 dividends per share to shareholders on December 20, 2021 and reported a net income of P2,240,000 for 2021 (earned evenly throughout the year). What is the balance of the investment in Arthur Corp. on December 31, 2021?
On January 1, 2020, Lovely Company paid P1,200,000 for 40,000 ordinary shares of Lonely Corporation which represent 25% investment in the net assets of Lonely. Lovely has the ability to exercise significant influence over Lonely. Lovely received a dividend of P3 per share from Lonely in 2020. The reported profit of Lonely for the year ended December 31, 2020 was P640,000. The balance of Lovely’s investment in Lonely at December 31, 2020 should be a. 1,480,000 b. 1,360,000 c. 1,240,000 d. 1,200,000
On January 25, 2023, Martin Ltd. purchased 5,000 common shares of NBC (National Bank of Canada) for $30 each. During the remainder of 2023, Martin received $1.60/share in dividends and NBC's earnings per share were $4.50. The closing price of the shares on the fiscal year-end date of December 31, 2023, was $31. Required Assume that Martin classified the investment as FVPL. a. At what value should the company report the NBC shares on its December 31, 2023, balance sheet? b. How much income should the company report in relation to these shares? c. How much other comprehensive income (OCI) should Martin report in relation to these shares? Requirement a. Assume that Martin classified the investment as FVPL. At what value should the company report the NBC shares on its December 31, 2023, balance sheet? The company should report the NBC shares at per share for a total of $ at December 31, 2023. Requirement b. Assume that Martin classified the investment as FVPL. How much income should the co
On January 1, 2019, Lallo Company
On January 1, 2018, Parent acquired 30,000 out of 100,000 outstanding ordinary shares of Sub for P90,000 or 30% interest. For the six months ended June 30, 2018, Sub reported net income of P40,000.On July 1, 2018, Parent acquired additional 60,000 ordinary shares of Sub or 60% interest at a price of P4 per share or total cost of P240,000. Parent paid P20,000 acquisition related costs and P10,000 indirect costs of business combination. The acquisition piece per share of the additional shares clearly reflected the fair value of the existing interest of Parent in Sub. It is the policy of Parent to initially measure the noncontrolling interest proportionate in net assets of the acquiree at fair value. The fair value of the noncontrolling interest in net assets of the acquiree is reliably measured at P50,000. At the acquisition date, the net assets of Sub were reported at P400,000. An asset of Sub was overvalued by P50,000 while one liability was overvalued by P30,000. what is the…