Problem 4-27 (Static) (LO 4-10) Posada Company acquired 7,000 of the 10,000 outstanding shares of Sabathia Company on January 1, 2022, for $840,000. The subsidiary's total fair value was assessed at $1,200,000 although its book value on that date was $1,130,000. The $70,000 fair value in excess of Sabathia's book value was assigned to a patent with a five-year remaining life. On January 1, 2024, Posada reported a $1,085,000 equity method balance in the Investment in Sabathia Company account. On October 1, 2024, Posada sells 1,000 shares of the investment for $191,000. During 2024, Sabathia reported net income of $120,000 and declared dividends of $40,000. These amounts are assumed to have occurred evenly throughout the year. Required: a. How should Posada report the 2024 income that accrued to the 1,000 shares prior to their sale? b. What is the effect on Posada's financial statements from this sale of 1,000 shares? a. b. Answer is not complete. Posada's income for shares sold Credit to Posada's additional paid-in capital

On January 1, 20x1, AAA Co. acquired 80% of the equity interests of BBB, Inc. in exchange for cash. Because the former owners of BBB needed to dispose of their investments in BBB by a specified date, they did not have sufficient time to market BBB to multiple potential buyers.As January 1, 20x1, BBB’s identifiable assets and liabilities have fair values of ₱2,400,000 and ₱800,000, respectively. Case #1:AAA Co. elects the option to measure non-controlling interest at fair value. An independent consultant was engaged who determined that the fair value of the 20% non-controlling interest in BBB, Inc. is₱310,000. If AAA Co. paid ₱2,000,000 cash as consideration for the 80% interest in BBB, Inc., how much is thegoodwill (gain on bargain purchase) on the business combination? Case #2:AAA Co. elects the option to measure non-controlling interest at fair value. An independent consultantwas engaged who determined that the fair value of the 20% non-controlling interest in BBB, Inc. is₱310,000.If…