On January 3, 2021, Matteson Corporation acquired 40 percent of the outstanding common stock of O'Toole Company for $1,443,000. This acquisition gave Matteson the ability to exercise significant influence over the investee. The book value of the acquired shares was $852,000. Any excess cost over the underlying book value was assigned to a copyright that was undervalued on its balance sheet. This copyright has a remaining useful life of 10 years. For the year ended December 31, 2021, O’Toole reported net income of $262,000 and declared cash dividends of $50,000. On December 31, 2021, what should Matteson report as its investment in O’Toole under the equity method? Investment
Q: On January 1, 2021, Herwin Company acquired 40%of GIC Company by purchasing 8,000 shares for…
A: Solution Given % acquired by Herwin 40% Number of shares purchased 8000 Purchase…
Q: On August 1, 2020, Swifty Corporation purchased 20% of the outstanding voting shares in WLT…
A:
Q: Phelp Corporation acquired 80% of the voting stock of Sam Inc. at an acquisition cost of $450,000 on…
A: In the given question we are provided with the information of Phelp Corporation. With the given data…
Q: Prepare a worksheet to consolidate these two companies as of December 31, 2021. Prepare a 2021…
A: Consolidated worksheet can be defined as the combined preparation of the financial statements of two…
Q: 10% share dividend on December 31, 2021. The entity elected to use the equity method in accounting…
A: Equity method is an accounting technique used by a company to record the profits made by its…
Q: On January 1, 2020, McIlroy, Inc., acquired a 60 percent interest in the common stock of Stinson,…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: Harper, Inc., acquires 40 percent of the outstanding voting stock of Kinman Company on January 1,…
A: Equity accounting: Equity accounting is a process for recording investments in associated companies.…
Q: Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, in exchange for $486,000…
A: Whenever a company purchase the business of another company it can be either amalgamation,…
Q: On January 1, 2020, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing,…
A: Consolidation: When it comes to corporate consolidation, the phrase refers to the merging of many…
Q: On January 1, 2020, McIlroy, Inc., acquired a 60 percent interest in the common stock of Stinson,…
A: Acquisition-date fair value allocation and excess amortizations a. Consideration transferred…
Q: STI Co. acquired 55% of the outstanding shares of UE Inc on August 1, 2021 at a total cost of…
A: Non Controlling Interest For the calculation of non controlling interest the minority interest which…
Q: How much gain from the sale of equipment must be reported in the consolidated income statement of Pe…
A: On January 1, 2021, Pe Inc. purchased Ra Corp. for P1,500,000 for 100% ownership of its common…
Q: On January 1, 2021, Sledge had common stock of $190,000 and retained earnings of $330,000. During…
A: The equity method is a method used by a company to record the profits earned by its investment in…
Q: On April 1, 2021, BBC Co. acquired a 30% stake in LTI Inc. for $ 100,000. This amount includes $…
A: Consolidated Income Statement: It can be referred to as an income statement prepared by the parent…
Q: On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company…
A:
Q: On January 1, 2020, Adamson, Inc. acquired the outstanding voting common stock of Skyview Corp. for…
A: Consolidated financial statements can be defined as the combined financial statements of the parent…
Q: On July 1, 2021, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $100…
A: Requirement 1: Pass a journal entry to record investment in shares.
Q: On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of…
A: Equity Balance Method - It if type of accounting method used at the time of investors holds…
Q: In January 2020, Domingo, Inc., acquired 20 percent of the outstanding common stock of Martes, Inc.,…
A: The question is based on the concept of financial accounting.
Q: On May 31, 2021 Armstrong paid $3,500,000 to acquire all of the common stock of Police Corp which…
A: Goodwill is an intangible asset. It is the value of company's brand name, solid customer base, good…
Q: On July 1, 2019, Killearn Company acquired 120,000 of the outstanding shares of Shaun Company for…
A:
Q: On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $300,000 when K-Tech's…
A: Net Income = Revenue - Expenses 1) Net income of French Company = 900000 - 500000 = $ 400000 2) Net…
Q: nership of Len, Gray has the ability to exercise significant influence over Len's financial and…
A: Disclaimer : “Since you have asked multiple question, we will solve the first question for you. If…
Q: On January 1, 2021, merma Corp. purchased 80% of the outstanding shares of sand Co. at a cost of…
A: Consolidated net income is associated with parent companies and their subsidiaries. A parent company…
Q: On January 1, 2020, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing,…
A: PLEASE LIKE THE ANSWER: Following information given in question Consideration transferred by…
Q: On January 1, 2020, Doone Corporation acquired 60 percent of the outstanding voting stock of Rockne…
A: Journal entry is the process of recording the business transactions in the accounting books for the…
Q: On January 1, 2021, Sledge had common stock of $240,000 and retained earnings of $380,000. During…
A: Non Controlling Interest - It is type of interest in the company where shareholder owns less than…
Q: On January 1, 2020, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company…
A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…
Q: The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc.,…
A: Consolidated financial statements are a set of financial statements prepared for a group company…
Q: On January 1, 2021, Patter Corp. purchased 80% of the outstanding shares of Saturn Co. at a cost of…
A: Solution Working- 1- Amortization excess = 50000/4 =12500. 2-Inter company dividend =…
Q: Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, in exchange for $342,000…
A: Intra entity transaction refers to the transfer price which is more than the cost of the inventory.…
Q: On January 1, 2020, Pharoah Corporation purchased 20% of the outstanding voting shares in WLT…
A: If the investment has significant influence then all earning are debited to investment account and…
Q: On January 1, 2021, Cameron Inc. bought 10% of the outstanding common stock of Lake Construction…
A: SOLUTION WORKING NOTE- PARTICULARS INVESTEE NET ASSETS OWNERSHIP INTEREST NET ASSET PURCHASED…
Q: Harper, Inc. acquires 40 percent of the outstanding voting stock of Kinman Company on January 1,…
A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…
Q: Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, in exchange for $351,000…
A: SOLUTION- GROSS PROFIT ALSO CALLED GROSS INCOME IS CALCULATED BY SUBTRACTING THE COST OF GOOD SOLD…
Q: On January 1, 2020, Doone Corporation acquired 60 percent of the outstanding voting stock of Rockne…
A: The question is based on the concept of Financial Accounting.
Q: What is the investment carrying amount at December 31, 2020?
A: The answer for the multiple choice question and relevant working are presented hereunder : Gray…
Q: On January 1, 2020, James Company purchased 100 percent of the outstanding voting stock of Nolan,…
A: Given information, James company purchased the 100% of outstanding voting stock of Nolan, Inc. for $…
Q: On January 1, 2020, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing,…
A: The report data given by Smashing is as follows,
Q: On July 1, 2021, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $110…
A: The acquisition is a term that When a company purchases some other organization's shares. These…
Q: On January 3, 2018, Matteson Corporation acquired 40 percent of the outstanding common stock of…
A: Equity method: Equity method is the method used for accounting equity investments which claim a…
Q: , acquired 70 percent of the outstanding shares of Sellinger Company for $1,274,000 in cash. The…
A: Profits or losses gained over a period of time are referred to as net income. Cumulative net income…
Q: On January 1, 2020, McIlroy, Inc., acquired a 60 percent interest in the common stock of Stinson,…
A: Consolidation is the process of combining and consolidating the books of two companies in which one…
Q: and other consideration. At the acquisition date, Smashing had common stock of $810,000, retained…
A: Given : Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a…
Q: The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc.,…
A: Consolidation Worksheet For Year Ending December 31, 2021 Accounts Holtz Corporation Devine Inc…
Q: On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company…
A: Calculation of additional paid-in capital: Fair value at the time of acquisition: Net Income +…
Q: Assuming the excess of acquisition cost over the underlying equity acquired is attributable to a…
A: The answer for the multiple choice question and relevant working are presented hereunder : Gray…
Q: On August 1, 2020, Oriole Corporation purchased 20% of the outstanding voting shares in WLT…
A: Journal Entry: Journal entry has two effects for every transaction. The journal entry is passed by…
Q: On June 1, 2020, Straw Company acquired 20% equivalent to 20,000 shares of Berry Company for…
A: Introduction:- A controlling interest in a corporation is one that owns enough voting stock shares…
Q: Harper, Inc., acquires 40 percent of the outstanding voting stock of Kinman Company on January 1,…
A: A journal entry is used to record day-to-day transactions of the business by debiting and crediting…
I have worked through the problem as best I can from what was offered in book and keep getting that it is a wrong answer. Please help with how to process?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- Parent Inc. purchased 60,000 of the outstanding (specified below) voting shares of Sub, for $625,000 (the total number of outstanding shares varies in the questions below) on January 1, 2021. On the date of acquisition, Sub's common shares and retained earnings were valued at $235,000 and $280,000, respectively. Subs book values approximated its fair values on the acquisition date with the exception of a patent, for which the fair value of the patent was $40,000 greater than book value. Q: Assume that the total number of outstanding shares for Sub was, 78,000 (remember Parent purchased 60,000). On January 2, 2021, Parent sold 12,000 shares of Sub on the open market for $108,000. What would be the amount of the gain or loss on the sale of these shares?On January 2, 2021, ABC Co. acquired 80% of XYZ Co. ordinary shares for P810,000. An amount of P37,500 of the excess is attributable to goodwill and the balance to a depreciable assets with an economic life of ten years. NCI is measured at fair value on the date of acquisition. On the date of acquisition, shareholder's equity accounts of the two entities were as follows: АВС Ordinary Shares - 1,312,500 Retained Earnings - 1,950,000 XYZ Ordinary Shares - 300,000 Retained Earnings - 525,000 On December 31, 2021, XYZ reported net income of 131,250 and paid dividends of P172,500. Goodwill have been impaired and should be reported at P7,500 on December 31, 2021. #6. What is the non-controlling interest in profit of XYZ on December 31, 2021? Select the correct response: 26,250.00 17,250.00 23,250.00 23,437.50On July 1, 2019, GAR Company acquired 800,000 shares of FAR Company at a price of P13 per share. GAR estimated that the price paid include P1.50 premium in order to gain control over FAR Company. On this date, the fair values of FAR Company’s identifiable assets and liabilities and their carrying values are given below: Book Value Fair ValueCurrent assets P2,000,000 P2,000,000Property, plant and equipment 9,000,000 11,000,000Liabilities P3,000,000 Ordinary shares, P5 par 5,000,000 Retained earnings 3,000,000 Determine the amount of goodwill assuming the non-controlling interest is measured at the proportionate share in the net assets:
- Reuniclus Company acquired 55% of the outstanding common stock of Vanillite Company on August 1, 2019 at a total cost of P5,005,000. At acquisition date, Vanillite 's common stock and retained earnings amounted to P200,000 and P4,800,000, respectively. All of Vanillite 's assets and liabilities had fair values equal to book values as of the acquisition date except for patents which had a fair value of P1,800,000.and a book value of P400,000. Reuniclus had an inventory with a fair value of P800,000 and a carrying amount of P700,000. All inventories was sold at the end of the year. The patents have a remaining life of five years. For 2019, Vanillite had a net income of P1,600,000, incurred evenly and Reuniclus had a net income of P2,000,000.Compute the net income attributable to the non-controlling interest? A. P202,500 B. P247,500 C. Answer not given D. P549,000 E. P594,000On January 3, 2021, Matteson Corporation acquired 40 percent of the outstanding common stock of O’Toole Company for $1,377,000. This acquisition gave Matteson the ability to exercise significant influence over the investee. The book value of the acquired shares was $909,000. Any excess cost over the underlying book value was assigned to a copyright that was undervalued on its balance sheet. This copyright has a remaining useful life of 10 years. For the year ended December 31, 2021, O’Toole reported net income of $261,000 and declared cash dividends of $50,000. On December 31, 2021, what should Matteson report as its investment in O’Toole under the equity methodGino Company acquired 30% of ABC Corporations share for P8,000,000 on July 1, 2020. ABCCorporation’s identifiable net assets on the date of acquisition are P20,000,000. Gino believes thatthe investee has known goodwill and the fair value of the corporation's net assets is the same as itscarrying amount except for the following: a. Equipment is undervalued by P2,000,000.b. Inventory’s fair value is P2,000,000 greater than its carrying amount. The equipment has a remaining life of 4 years and depreciated using the straight-line method. At theend of 2020, all inventories at the acquisition date are entirely sold.On November 30, ABC Corporation pays a P2,000,000 dividend to its shareholders. During the year,ABC Corporation reported a net income of P5,000,000, 40% of these were earned in the first half ofthe year. The fair value of ABC Corporation's shares held by Gino at the end of 2020 is P8,250,000.Requirements:1. Prepare the necessary journal entries to record the above transactions.2.…
- Gino Company acquired 30% of ABC Corporations share for P8,000,000 on July 1, 2020. ABCCorporation’s identifiable net assets on the date of acquisition are P20,000,000. Gino believes thatthe investee has known goodwill and the fair value of the corporation's net assets is the same as itscarrying amount except for the following: a. Equipment is undervalued by P2,000,000.b. Inventory’s fair value is P2,000,000 greater than its carrying amount. The equipment has a remaining life of 4 years and depreciated using the straight-line method. At theend of 2020, all inventories at the acquisition date are entirely sold.On November 30, ABC Corporation pays a P2,000,000 dividend to its shareholders. During the year,ABC Corporation reported a net income of P5,000,000, 40% of these were earned in the first half ofthe year. The fair value of ABC Corporation's shares held by Gino at the end of 2020 is P8,250,000.Requirements: 1. Suppose that on November 30, 2020, ABC Corporation revalued its Land that…PRT acquired 100% of SUB's ordinary shares on 1 January 2019 for R1,136,000 when SUB's retained earnings were R260,000. At 1 January 2019 the fair value of the net assets of SUB exceeded their carrying value by R110,000. The remaining useful life of these assets was 11 years from acquisition. SUB has not issued any new shares since acquisition by PRT. SUB is PRT's only subsidiary. PRT calculated that goodwill in its subsidiary was impaired by 20 % at 31 December 2021. The equity of SUB as at 31 December 2021; R000 Ordinary share capital 430 Share premium 86 Retained earnings 324 -- 840 The retained earnings of PRT were R2,100,000 at 31 December 2021. Required: Calculate the amount that PRT should incluce in its consolidated statement of financial position as at 31 December 2021 for: (0 Goodwill Group retained earningsSTI Co. acquired 55% of the outstanding shares of UE Inc on August 1, 2021 at a total cost of P5,005,000. At acquisition date, UE's ordinary shares and retained earnings amounted to P200,000 and P4,800,000. All assets and liabilities fair values equal to their book values except for the patent which had a fair value of P1,800,000 and a book value of P400,000. The patents have a remaining life of 5 years. For 2021, UE had the following earnings and dividends: Net Income Jan - July = 500,000 Aug - Dec = 1,100,000 Dividends Paid Jan - July = 1,100,000 Aug - Dec = 1,200,000 What is the net income attributable to the noncontrolling interest?
- POM acquired 80% of the share of SOM for $26,550 on 1 Jan 2019, the date of acquisition (DOA). At this date, the equity of SOM consisted of share capital of $15,000 and retained earnings of $12,250. At 1 Jan 2019, all the identifiable assets and liabilities of SOM were recorded at fair value except for the following: Carrying amount Fair value Plant $7,500 $10,000 The plant had a remaining useful life of 5 years with depreciation based on the straight-line method. The fair value of the non-controlling interest (NCI) in SOM on DOA was $6,000. Tax rate is 10%. On 1 Jan 2021, POM acquired 30% of the shares of AOM for $7,450. Significance influence on AOM was obtained as a result. At this date, AOM's equity consisted of the share capital of $7,500 and retained earnings of $11,250. AOM made a profit of $5,200 for the year ended 31 Dec 2021. The following intra-group or inter-entity transactions happened in the period from 1 Jan 2021 to 31 Dec 2021 1. On 1 Jan 2021, POM held an inventory of…On July 19, 2021, SUNOB acquired 60% of the outstanding shares of YSAE. The business combination resulted to a gain on bargain purchase of P200,000. The consideration paid was exactly the fair value for the 60% outstanding stocks, and the fair value of the non-controlling interest is not given. Fair value of the net assets of YSAE amounted to P1,000,000 on that date. How much is the gain on acquisition attributable to SUNOB? Zero 600,000 200,000 120,000On July 19, 2021, SUNOB acquired 60% of the outstanding shares of YSAE. The business combination resulted to a gain on bargain purchase of P200,000. The consideration paid was exactly the fair value for the 60% outstanding stocks, and the fair value of the non-controlling interest is not given. Fair value of the net assets of YSAE amounted to P1,000,000 on that date. How much is the gain on acquisition attributable to SUNOB? Group of answer choices a.600,000 b.120,000 c.Zero d.200,000