What is the investment carrying amount at December 31, 2020?
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On March 1, June 1. September 1 and December 1, all of 2020, Len paid quarterly dividend of P0.50 per ordinary share on each of these dates. Len's profit for the year ended December 31, 2020 was P1,200,000, that was earned evenly throughout the year. At December 31, 2020, each ordinary share of Len Company was selling at P16.
What is the investment carrying amount at December 31, 2020?
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- On March 31, 2020, Gray Company purchased 120,000 ordinary shares of Len Company for P 1,700,000, representing 30% of Len’s outstanding ordinary shares and an underlying equity of P1,400,000 in Len's net assets on January 2, 2020. The excess of the acquisition cost over the equity acquired cannot be attributed to any tangible asset As a result of Gray's 30% ownership of Len, Gray has the ability to exercise significant influence over Len's financial and operating policies.On March 1, June 1. September 1 and December 1, all of 2020, Len paid quarterly dividend of P0.50 per ordinary share on each of these dates. Len's profit for the year ended December 31, 2020 was P1,200,000, that was earned evenly throughout the year. At December 31, 2020, each ordinary share of Len Company was selling at P16.1. What is Gray's income from associates for the year 2020? a. P360,000 b. P330,000 c. P300,000 d. P270,000 2. What is the investment carrying amount at December 31, 2020? a.…On March 31, 2020, Gray Company purchased 120,000 ordinary shares of Len Company for P 1,700,000, representing 30% of Len’s outstanding ordinary shares and an underlying equity of P1,400,000 in Len's net assets on January 2, 2020. The excess of the acquisition cost over the equity acquired cannot be attributed to any tangible asset As a result of Gray's 30% ownership of Len, Gray has the ability to exercise significant influence over Len's financial and operating policies.On March 1, June 1. September 1 and December 1, all of 2020, Len paid quarterly dividend of P0.50 per ordinary share on each of these dates. Len's profit for the year ended December 31, 2020 was P1,200,000, that was earned evenly throughout the year. At December 31, 2020, each ordinary share of Len Company was selling at P16. Assuming the excess of acquisition cost over the underlying equity acquired is attributable to a piece of equipment with a remaining life of 5 years on the date of investment acquisition, and…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. 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…On March 31, 2020, QuezonCompany purchased 120,000 ordinary shares ofRizalCompany for P1,700,000, representing 30% of RizalCompany’s outstanding ordinary shares and an underlying equity of P1,400,000 in RizalCompany’s net assets on that date. The excess of the acquisition cost over the equity acquired cannot be attributed to any tangible asset. As a result of Quezon’s 30% ownership of RizalCompany, Quezonhas the ability to exercise significant influence over RizalCompany’s financial and operating policies.On March 1, June1, September 1 and December 1, all of 2020, RizalCompany paid quarterly dividend of P0.50 per ordinary share on each of these dates.RizalCompany’s profit for the year ended December 31, 2020was P1,200,000 that was earned evenly throughout the year. AtDecember 31, 2020, each ordinary share of RizalCompany was selling at P16.Required:1.What is QuezonCompany’s income from associates for the year 2020?2.What is the investment carrying amount onDecember 31, 2020?3.Assuming…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 600,000 200,000 120,000
- 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? Group of answer choices a.600,000 b.120,000 c.Zero d.200,000On 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? a. 600,000 b. 120,000 c. Zero d. 200,000On 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, 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 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 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.…
