will be the amount of goodwill that would be reported immediately after the combination under the accounting practice if the option of full-goodwill method is used?
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A: Gain on sale of investment = P 4500000 - (50% x P5000000) = P2000000
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A: PLEASE LIKE THE ANSWER NOTE : AS IN THE QUESTION IT SPECIFICALLY SAYS FOR ENTRY FOR I ONLY entry…
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A: Introduction: Consolidated financial statements are the combining of the statements of a group in…
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A: Workings:
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A: 2019 instead of 2016. 2020 instead of 2017. 2021 instead of 2018.
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A: Formulas:
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A:
Q: On January 3, 2021, Matteson Corporation acquired 40 percent of the outstanding common stock of…
A: Calculation under Equity method:
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A: Consolidated financial statements are a set of financial statements prepared for a group company…
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A: Income earned 2019=Income ×612=$641,000×612=$320,500
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A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
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A: Disclaimer : “Since you have asked multiple question, we will solve the first question for you. If…
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A: PLEASE LIKE THE ANSWER: Following information given in question Consideration transferred by…
Q: The fair value of the expected contingent payment increases goodwill at the acquisition date.
A: As it is given in the above case that "Jordan’s profits exceed this threshold in both years". It…
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A: Goodwill = Sale Consideration + Fair Value of Non Controlling Interest - Book Value
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A: Journal entry is the process of recording the business transactions in the accounting books for the…
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A: Accruals are revenues or expenditures incurred that influence a company's net income on the…
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A:
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A: The answer for the multiple choice question and relevant working are presented hereunder : Gray…
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A: The report data given by Smashing is as follows,
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A:
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A:
Q: On January 1, 2019, Post Corporation acquired 80 percent of Star Company's common stock for $160,000…
A: THE CORRECT OPTION IS OPTION B BALANCE OF INVESTMENT IN STAR COMPANY ON DECEMBER 31 , 2020 =…
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A: on january 1, 2020 the equipment valued at 59000 of peasy on January 1,2020 the equipment valued to…
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A: Given information: Percentage acquired = 80% Acquisition price = $160,000 Net income for 2019 =…
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A: The answer for the multiple choice question and relevant working are presented hereunder : Gray…
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A: This question deals with the concept of business combination, which is dealt by the IFRS 3 . This…
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A: Goodwill is the excess amount paid for acquisition which is over and above fair market of the…
On January 1, 2019, Lady Gaga Company acquires 80 percent ownership in Madonna Company for P200,000. The fair value of the non-controlling interest at that time is determined to be P50,000. Madonna Company reports net assets with a book value of P200,000 and fair value of P230,000. Lady Gaga Company reports net assets with a book value of P600,000 and a fair value of P650,000 at that time, excluding its investment in Madonna Company. What will be the amount of
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- On January 10, 2020, Fey Co. acquired a 40% interest in Hana Co. for P4,800,000. Fey already held a 25% interest which had been acquired for P1,600,000 but which was valued at P1,920,000 at January 10, 2020. The fair value of non-controlling interest(NCI) at January 10, 2018 was P2,400,000, and the fair value of the identifiable net assets of Hana Co. was P8,400,000.How much is the goodwill to be recognized as a result of business combination?On January 1, 2020, Coco Inc. purchased 90% ownership in Martin Corp. at underlying book value. The fair value of the non-controlling interest at the date of acquisition was equal to 10% of the book value of Martin Corp. On April 1, 2020, Martin Corp. purchased inventory from Coco Inc. for P180,000. Martin Corp. sold the entire inventory to unrelated parties for P240,000 on December 1, 2020. Coco Inc. had purchased the inventory sold to Martin Corp. for P124,000. The companies had no other transactions during 2020. What amount of cost of goods sold will be reported in the 2020 consolidated financial statements?* a. P 116,000 b. P 240,000 c. P 124,000 d. P 180,000 Thank you for answeringOn 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:
- On January 1, 2020, Erika Company (Erika) purchased 62% interest in Finn Limited (Finn) for $8,290,000, at which time Finn had retained earnings of $5,430,000 and share capital of $550,000. On the date of acquisition, the fair value of the assets and liabilities of Finn was equal to their book value, except for an intangible asset, which had a fair value of $1,120,000 and a book value of $960,000. The intangible asset would be useful for another 8 years. On January 1, 2021, Erika sold the equipment to Finn for $1,425,000. The equipment was purchase by Erika for $2,300,000 on January 1, 2016. At that time, the equipment was estimated to have a total of 10-year life with no salvage value. The estimate for the total useful life and the salvage value remained unchanged at the date of transfer. Finn reported net income of $455,000 in 2021. And Erika reported net income of $1,510,000 in 2021. Neither company declared dividends in 2021. The amount of consolidated net income attributable to…On July 1, 2020, Blue George Company purchased 25% interest of Pink Conrad for P150,000. Blue George incurred transaction cost equal to 5% on the transaction price. On October 1, 2020, Pink Conrad declared dividends of P80,000. At the end of 2020, Pink Conrad reported net income of P200,000. On January 1, 2021, the fair values of Pink Conrad's net assets were as follows:Current Assets - P100,000;Equipment - P150,000;Patent – P120,000;Land - P50,000;Buildings - P300,000; andLiabilities - P80,000. On January 1, 2021, Blue George Company purchased 50% interest of the Pink Conrad Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. Pink Conrad paid for the legal fees of P10,000 and securities SEC registration of P20,000 which was reimbursed by Blue George. The Patent of Pink Conrad refers to the technology purchased by Pink Conrad from Blue George years ago. Blue George had an outstanding unearned revenue related to the Patent amounting to…On July 1, 2020, Blue George Company purchased 25% interest of Pink Conrad for P150,000. Blue George incurred transaction cost equal to 5% on the transaction price. On October 1, 2020, Pink Conrad declared dividends of P80,000. At the end of 2020, Pink Conrad reported net income of P200,000. On January 1, 2021, the fair values of Pink Conrad's net assets were as follows:Current Assets - P100,000;Equipment - P150,000;Patent – P120,000;Land - P50,000;Buildings - P300,000; andLiabilities - P80,000. On January 1, 2021, Blue George Company purchased 50% interest of the Pink Conrad Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. Pink Conrad paid for the legal fees of P10,000 and securities SEC registration of P20,000 which was reimbursed by Blue George. The Patent of Pink Conrad refers to the technology purchased by Pink Conrad from Blue George years ago. Blue George had an outstanding unearned revenue related to the Patent amounting to…
- Denber Co. acquired 60% of the common stock of Kailey Corp. on September 1, 2019. For 2019, Kailey reported revenues of $810,000 and expenses of $630,000, not including its investment in Denber, and all reflected evenly throughout the year. The annual amount of amortization related to this acquisition was $15,000. What is the amount of the noncontrolling interest's share of Kailey's income for 2019? a. $72,000. b. $22,000. c. $66,000. d. $24,000. e. $48,000.On January 1, 2019, Field Company acquired 40% of North Company by purchasing 10,000 shares for $180,000 and obtained significant influence. On the date of acquisition, Field calculated that its share of the excess of the fair value over the book value of North’s depreciable assets was $15,000 and that the purchased goodwill was $12,000. At the end of 2019, North reported net income of $45,000 and paid dividends of $0.60 per share. Field depreciates its depreciable assets over a 12-year remaining life. Required: 1. Prepare all the journal entries of Field to record the preceding information for 2019. 2. Next Level What is the conceptual justification for the use of the equity method? {Chart of Accounts} {General Journal} The conceptual justification for the use of the equity method is: a. It recognizes that fair value is not an appropriate valuation method for the investment because the investor could influence the amount of income it recognizes. b. It recognizes…On January 1, 2019, Field Company acquired 40% of North Company by purchasing 8,000 shares for $144,000 and obtained significant influence. On the date of acquisition, Field calculated that its share of the excess of the fair value over the book value of North’s depreciable assets was $15,000 and that the purchased goodwill was $12,000. At the end of 2019, North reported net income of $50,000 and paid dividends of $0.80 per share. Field depreciates its depreciable assets over a 12-year remaining life. Required: 1. Prepare all the journal entries of Field to record the preceding information for 2019. 2. Next Level What is the conceptual justification for the use of the equity method?
- On January 4, 2021, Jonathan Company purchased 75% interest in Monica Corporation for P300,000. Monica’s recorded assets and liabilities as of acquisition are P400,000 and P120,000, respectively. Net asset of Monica is fairly valued except for inventory which is over-valued by P20,000 and machinery (5-year useful life) which is under-valued by P40,000. NCI is measured at fair value. For the year 2021, Jonathan reported net income of P150,000 and paid dividend of P80,000 while Monica reported net income of P40,000 and paid dividend of P20,000. The parent elects the “equity method” in accounting for its investment in subsidiary. The working paper elimination entry for 2021 will include: a. Debit to dividend income, P15,000. b. Credit share in profit of the subsidiary, P30,000. c. Debit goodwill, P100,000 d. Credit depreciation expense, P8,000Reuniclus 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 1 July 2019, Michelle Ltd acquired all the issued shares of Tracy Ltd, paying $250 000 cash. At that date, the financial statements of Tracy Ltd showed the following information. Share Capital $100000 Retained Earnings 100000 All the assets and liabilities of Tracy Ltd were recorded at amounts equal to their fair values at the acquisition date, except some inventories recorded at $10 000 below their fair value. Also, Michelle Ltd identified at acquisition date a patent with a fair value of $40 000 that Tracy Ltd has not recorded in its own accounts. Required Prepare the acquisition analysis at 1 July 2019. Prepare the consolidation worksheet entries for Michelle Ltd’s group at 1 July 2019. Discuss how the answers for 1 and 2, above, would change if the Michelle Ltd paid only $200 000 cash for the shares in Tracy Ltd.