the amount paid, how much is attributable to goodwill?
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Jimin, Inc. purchased 40% of Hope Inc.’s outstanding ordinary shares on January 2, 2021, for $270,000,000. Jimin obtained significant influence over Jimin. The book value of Hope's net assets at the purchase date totalled $450,000,000. Book values and fair values were the same for all financial statement items except for inventory and buildings, for which fair values exceeded book values by $12,500,000 and $112,500,000, All inventories on hand at the purchase date was sold during 2021. The buildings have average remaining useful lives of 15 years. Hope, Inc. reported net income of $110,000,000 for the year ended December 31, 2021, and paid cash dividends of $50,000,000. The fair value of Jimin, Inc.’s investment in associate was $300,000,000 at December 31, 2021.
Of the amount paid, how much is attributable to
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- Jimin, Inc. purchased 40% of Hope Inc.’s outstanding ordinary shares on January 2, 2021, for P270,000,000. Jimin obtained significant influence over Hope. The book value of Jimin's net assets at the purchase date totalled $450,000,000. Book values and fair values were the same for all financial statement items except for inventory and buildings, for which fair values exceeded book values by $12,500,000 and $112,500,000, All inventories on hand at the purchase date was sold during 2021. The buildings have average remaining useful lives of 15 years. Hope, Inc. reported net income of $110,000,000 for the year ended December 31, 2021, and paid cash dividends of $50,000,000. The fair value of Jimin, Inc.’s investment in associate was $300,000,000 at December 31, 2021. How much is the value of the Investment in Associates on December 31, 2021?On January 3, 2023, Trycker, Incorporated acquired 40% of the outstanding common stock of Inkblot Company for $2,400,000. This investment gave Trycker the ability to exercise significant influence over Inkblot. Inkblot's assets on that date were recorded at $8,000,000 with liabilities of $2,000,000. There were no other differences between book and fair values. During 2023, Inkblot reported net income of $500,000 and paid dividends of $300,000. The fair value of Inkblot at December 31, 2023, is $7,000,000. Trycker elects the fair value option for its investment in Inkblot. How are dividends received from Inkblot reflected in Trycker's accounting records for 2023?On July 1, 2021, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $135 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At the date of acquisition of the stock, VB’s net assets had a total fair value of $440 million and a book value of $240 million. Of the $200 million difference, $28 million was attributable to the appreciated value of inventory that was sold during the last half of 2021, $132 million was attributable to buildings that had a remaining depreciable life of 15 years, and $40 million related to equipment that had a remaining depreciable life of 10 years. Between July 1, 2021, and December 31, 2021, VB earned net income of $36 million and declared and paid cash dividends of $28 million. Required:1. Prepare all appropriate journal entries related to the investment during 2021, assuming Gupta accounts for this investment by the equity method.2. Determine the amounts to be reported by Gupta.…
- On April 1, 2021, BBC Co. acquired a 30% stake in LTI Inc. for $ 100,000. This amount includes $ 40,000 that represents the excess of the fair market value over the book value of the identifiable net assets that LTI Inc. had on its books as of that date. Of this difference of $ 40,000, BBC attributes that $ 15,000 is due to inventory that was sold in its entirety during 2021, and the remaining $ 25,000 is due to goodwill. On the other hand, LTI generated a net income of $ 20,000 for 2021, and paid dividends of $ 2,500 for each quarter. As a consequence of these effects on LTI's books and financial statements, BBC will recognize investment income (or loss) for a. $4,500 b. $1,125 c. $3,450 d. ($10,500)On July 1, 2021, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $110 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At the date of acquisition of the stock, VB’s net assets had a total fair value of $360 million and a book value of $240 million. Of the $120 million difference, $22 million was attributable to the appreciated value of inventory that was sold during the last half of 2021, $84 million was attributable to buildings that had a remaining depreciable life of 15 years, and $14 million related to equipment that had a remaining depreciable life of 5 years. Between July 1, 2021, and December 31, 2021, VB earned net income of $24 million and declared and paid cash dividends of $16 million. Required:1. Prepare all appropriate journal entries related to the investment during 2021, assuming Gupta accounts for this investment by the equity method.2. Determine the amounts to be reported by Gupta.On July 1, 2024, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $116 million cash, giving Gupta the ability to exercise significant influence over VB's operations. At the date of acquisition of the stock, VB's net assets had a total fair value of $414 million and a book value of $236 million. Of the $178 million difference, $36 million was attributable to the appreciated value of inventory that was sold during the last half of 2024, $80 million was attributable to buildings that had a remaining depreciable life of 10 years, and $62 million related to equipment that had a remaining depreciable life of five years. Between July 1, 2024, and December 31, 2024, VB earned net income of $48 million and declared and paid cash dividends of $32 million. Required: 1. Prepare all appropriate journal entries related to the investment during 2024, assuming Gupta accounts for this investment by the equity method. 2. Determine the amounts to be reported by Gupta.…
- On July 1, 2021, Gupta Corporation bought 30% of the outstanding common stock of VB Company for $170 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At the date of acquisition of the stock, VB’s net assets had a total fair value of $490 million and a book value of $220 million. Of the $270 million difference, $50 million was attributable to the appreciated value of inventory that was sold during the last half of 2021, $160 million was attributable to buildings that had a remaining depreciable life of 10 years, and $60 million related to equipment that had a remaining depreciable life of 5 years. Between July 1, 2021, and December 31, 2021, VB earned net income of $60 million and declared and paid cash dividends of $50 million. Required:1. Prepare all appropriate journal entries related to the investment during 2021, assuming Gupta accounts for this investment by the equity method. a. Record the purchase of VB company shares for $170.0…On July 1, 2021, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $100 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At the date of acquisition of the stock, VB’s net assets had a total fair value of $350 million and a book value of $220 million. Of the $130 million difference, $20 million was attributable to the appreciated value of inventory that was sold during the last half of 2021, $80 million was attributable to buildings that had a remaining depreciable life of 10 years, and $30 million related to equipment that had a remaining depreciable life of 5 years. Between July 1, 2021, and December 31, 2021, VB earned net income of $32 million and declared and paid cash dividends of $24 million.Required:1. Prepare all appropriate journal entries related to the investment during 2021, assuming Gupta accounts for this investment by the equity method.2. Determine the amounts to be reported by Gupta:a. As an…On July 1, 2024, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $104 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At the date of acquisition of the stock, VB’s net assets had a total fair value of $366 million and a book value of $224 million. Of the $142 million difference, $24 million was attributable to the appreciated value of inventory that was sold during the last half of 2024, $80 million was attributable to buildings that had a remaining depreciable life of 10 years, and $38 million related to equipment that had a remaining depreciable life of five years. Between July 1, 2024, and December 31, 2024, VB earned net income of $32 million and declared and paid cash dividends of $26 million. Required: Prepare all appropriate journal entries related to the investment during 2024, assuming Gupta accounts for this investment by the equity method. Determine the amounts to be reported by Gupta.
- On July 1, 2024, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $136 million cash, giving Gupta the ability to exercise significant influence over VB's operations. At the date of acquisition of the stock, VB's net assets had a total fair value of $494 million and a book value of $256 million. Of the $238 million difference, $56 million was attributable to the appreciated value of inventory that was sold during the last half of 2024, $80 million was attributable to buildings that had a remaining depreciable life of 10 years, and $102 million related to equipment that had a remaining depreciable life of five years. Between July 1, 2024, and December 31, 2024, VB earned net income of $72 million and declared and paid cash dividends of $42 million. Required: 1. Prepare all appropriate journal entries related to the investment during 2024, assuming Gupta accounts for this investment by the equity method. 2. Determine the amounts to be reported by Gupta.…On April 1, 2024, BigBen Company acquired 35% of the shares of LittleTick, Incorporated BigBen paid $140,000 for the investment, which is $52,000 more than 35% of the book value of LittleTick's identifiable net assets. BigBen attributed $12,400 of the $52,000 difference to inventory that will be sold in the remainder of 2024, and the rest to goodwill. LittleTick recognized a total of $17,000 of net income for 2024, and paid total dividends for the year of $10,800; these dividends were issued quarterly. BigBen's investment in LittleTick will affect BigBen's 2024 net income by: Note: Round your answer to nearest whole dollar amount. Multiple Choice earnings of $2,901. a loss of $7,938. earnings of $4,463. earnings of $1,562.On January 1, 2022, Pop Co. acquired 75% of the outstanding common shares of Soda Inc. for $161,250 cash. On that date, Soda had common shares of $156,250 and retained earnings of $31,250. At acquisition, the identifiable assets and liabilities of Soda had fair values that were equal to carrying amounts except for inventory, which had fair value $8,000 greater than carrying amount and plant and equipment, which had fair values $10,000 greater than carrying amounts. The plant and equipment had a remaining useful life of 5 years on January 1, 2022.Any goodwill will be tested yearly for impairment. Balance sheets as of December 31, 2022 are presented below: Cash Accounts receivable Inventory Land Plant & Equipment, net Investment in Soda Inc. - equity Current liabilities Bonds payable Common shares Retained earnings Pop Co. $ 10,000 Soda Inc. $ 5,000 38,750 42,250 75,250 62,500 50,000 100,000 150,000 175,000 168,500 $384,750 $492,500 $ 45,500 - 338,000 109,000 $492,500 $ 47,125 128,125…
