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- Matrix, Inc. acquired 20% of Neo Enterprises for $500,000 on January 1, 2015. The fair value and book value of 20% of Neo's identifiable net assets was $500,000 and $480,000 on that date, and the difference was attributable to assets that would be depreciated over 10 years. During 2015 Neo recognized net income of $200,000 and paid dividends of $100,000. Neo had a total fair value of $528,000 as of December 31, 2015. Required: Prepare the journal entries necessary to account for the Neo investment, assuming that Matrix accounts for that investment as (1) an equity method investment, and (2) elects the fair-value option. Show entries for the purchase of the investment, recognition of net income, receipt of dividends, and adjustment at year-end, as appropriate. Indicate whether gains or losses (realized, unrealized) are reported on the income statement or other comprehensive income.Matrix, Inc. acquired 20% of Neo Enterprises for $500,000 on January 1, 2015. The fair value and book value of 20% of Neo's identifiable net assets was $500,000 and $480,000 on that date, and the difference was attributable to assets that would be depreciated over 10 years. During 2015 Neo recognized net income of $200,000 and paid dividends of $100,000. Neo had a total fair value of $528,000 as of December 31, 2015. Required: Prepare the journal entries necessary to account for the Neo investment, assuming that Matrix accounts for that investment as (1) an equity method investment, and (2) elects the fair-value option. Show entries for the purchase of the investment, recognition of net income, receipt of dividends, and adjustment at year-end, as appropriate. Indicate whether gains or losses (realized, unrealized) are reported on the income statement or other comprehensive income. Date Accounts Debit Credit Equity Method Investment in Neo…Matrix, Inc. acquired 20% of Neo Enterprises for $500,000 on January 1, 2015. The fair value and book value of 20% of Neo's identifiable net assets was $500,000 and $480,000 on that date, and the difference was attributable to assets that would be depreciated over 10 years. During 2015 Neo recognized net income of $200,000 and paid dividends of $100,000. Neo had a total fair value of $528,000 as of December 31, 2015. Required: Prepare the journal entries necessary to account for the Neo investment, assuming that Matrix accounts for that investment as (1) an equity method investment. Show entries for the purchase of the investment, recognition of net income, receipt of dividends, and adjustment at year-end, as appropriate. Indicate whether gains or losses (realized, unrealized) are reported on the income statement or other comprehensive income.
- Matrix, Inc. acquired 20% of Neo Enterprises for $500,000 on January 1, 2015. The fair value and book value of 20% of Neo's identifiable net assets was $500,000 and $480,000 on that date, and the difference was attributable to assets that would be depreciated over 10 years. During 2015 Neo recognized net income of $200,000 and paid dividends of $100,000. Neo had a total fair value of $528,000 as of December 31, 2015. Required: Prepare the journal entries necessary to account for the Neo investment, assuming that Matrix accounts for that investment as elects the fair-value option. Show entries for the purchase of the investment, recognition of net income, receipt of dividends, and adjustment at year-end, as appropriate. Indicate whether gains or losses (realized, unrealized) are reported on the income statement or other comprehensive income.Matrix, Inc. acquired 25% of Neo Enterprises for $2,000,000 on January 1, 2014. The fair value and book value of 25% of Neo's identifiable net assets was $2,000,000 and $1,600,000 on that date, and the difference was attributable to assets that would be depreciated over 10 years. During 2014 Neo recognized net income of $500,000 and paid dividends of $400,000. Matrix’s portion of Neo’s fair value was $2,500,000 as of December 31, 2014. Required: Prepare the journal entries necessary to account for the Neo investment, assuming that Matrix accounts for that investment as (1) an equity method investment, and (2) elects the fair-value option. Show entries for the purchase of the investment, recognition of net income, receipt of dividends, and adjustment at year-end, as appropriate. DATE ACCOUNTS DEBIT CREDIT EQUITY METHOD FAIR…On January 1, 2015, Parker Company acquired 90% of the common stock of Stride Company for $351,000.On this date, Stride had common stock, other paid-in capital in excess of par, and retained earnings of $100,000, $40,000, and $210,000, respectively. The excess of cost over book value is due to goodwill. In both 2015 and 2016, Parker accounted for the investment in Stride using the cost method.On January 1, 2015, Stride sold $100,000 par value of 10-year, 8% bonds for $94,000. The bonds pay interest semiannually on January 1 and July 1 of each year. On December 31, 2015, Parker purchased all of Stride’s bonds for $98,200. The bonds are still held on December 31, 2016. Both companies correctly recorded all entries relative to bonds and interest, using straight-line amortization for premium or discount.The trial balances of Parker Company and its subsidiary were as follows on December 31, 2016: (see attachment)Prepare the worksheet necessary to produce the consolidated financial…
- JLB Enterprises acquired 15% of REB Corporation on January 1, 2018, for $63,000 when the book value of REB's net assets was $360,000. During 2018, REB reported net income of $90,000 and paid dividends of $30,000. On January 1, 2019, JLB for $120,000. purchased an additional 25% of REB Any excess of cost over book value was attributable to goodwill (No amortization). On that same date, JLB changed to the equity method. During 2019, REB reported net income of $120,000 and paid dividends of $45,000. a. What investment income did JLB record from REB in 2018? b. What investment income did JLB record from REB in 2019? C. What journal entry was made on Jan 1 2019 as switch equity method? d. What was the balance in Equity Investment at December 31, 2019? (Hint: use the amount paid for 25% of REB from JLB to calculate the implied fair value of the original 15% of the investment)On December 31, 2017, X Company paid $3,600,000 for 100% of the stock of Y Company when Y's underlying net assets had a fair value of $2,800,000. Almost immediately after the acquisition, X paid $240,000 for an advertising campaign that was designed to maintain goodwill. How much will be reported as goodwill on X Company's December 31, 2018 balance sheet?On January 1, 2022, P Company acquired 80% of S Company for P2,000,000. The fair value of identifiable net assets is P1,800,000. NCI is measured at fair value. During 2022, P Company ships merchandise to S Company costing P800, 000 at 25% above cost. Additional data are as follows: P Company S Company Sales 5,500,000 2,500,000 Cost of Sales 3,200,000 1,600,000 Operating Expense 650,000 300,000 The ending inventories of S Company includes merchandise from P Company amounting to P50,000. Impairment of goodwill is P20,000. (INPUT YOUR ANSWERS IN FIGURES. DO NOT PUT ANY COMMA, PESO SIGN, DECIMALS, AND EXTRA SPACES) Consolidated cost of sales is reported at The net income attributable to parent is
- On January 1, 2022, P Company acquired 80% of S Company for P2,000,000. The fair value of identifiable net assets is P1,800,000. NCI is measured at fair value. During 2022, P Company ships merchandise to S Company costing P800, 000 at 25% above cost. Additional data are as follows: P Company S Company Sales 5,500,000 2,500,000 Cost of Sales 3,200,000 1,600,000 Operating Expense 650,000 300,000 The ending inventories of S Company includes merchandise from P Company amounting to P50,000. Impairment of goodwill is P20,000. Consolidated cost of sales is reported at The net income attributable to parent isEmily Corporation acquired inventories on May 1, 2015 from its 70% owned subsidiary, SR Company. The inventories were sold for P188,000, including the 25% mark up on cost. Out of these inventories, 65% were sold to outsiders. During 2016, Emily Corporation reported net income of P430,000 and SR Company reported net income of 280,000 How much is the realized profit to be allocated to non-controlling interest in 2016? a 732 b. 4,935 c. 13,160 d. 3,948On August 1, 2017, Concord Corporation acquired Skysong, Inc. for a cash payment of $2.10 million. At the time of purchase, Skysong's balance sheet showed assets of $4,350,000, liabilities of $2,550,000, and owners' equity of $1,800,000. The fair value of Skysong's identifiable assets is estimated to be $4,326,000. Compute the amount of goodwill acquired by Concord. Value assigned to goodwill $