Chapter 10, Problem 7DYS

Panama Company acquired 60 %of Samoa Corporation on 1/2018. Fair values of Samoa's assets and liabilitiesapproximated book values on that date. Panama uses the initial value methodto account for its investment in Samoa.On 1/2019, Panama bought equipment from Samoa for $60,000 that hadoriginally cost Samoa $120,000 and had $ 90,000of Accumulated depreciation at the time. The equipment had a five-yearremaining life and was being depreciated using the straight line method.You are preparing the worksheet for the 2020 fiscal year.a. Was this equipment sale upstream or downstream?b. How much unrealized net gain from the equipment transfer remains at thebeginning of 2020? (this is the amount you will need for the *TA entry at 1/2020.)c. Which company's Retained earnings account will be adjusted in the *TA entryin part a? (Which company was the “initiator” of the transaction?)d. How much excess depreciation will there be in each of the first five yearsafter the transfer?e. Panama's 2020 net…

Assume there are three separate real estate companies: US Realty (which applies the cost model with straight-line depreciation), UK Realty (which applies the revaluation model), and Singapore Realty (which applies the fair value model). Assume that on January 1, 2020, each company pays $1,000 to obtain an investment property, comprised of the land of negligible value and a building worth $1,200 (fair value). The building has a 10-year useful life, no residual value, and the fair value of the property is close to its value-in-use. If the companies want to sell the property, the transaction cost is negligible. (Hint: Use the account ``Fair Value Gain/Loss on Investment Property’’ when applying the fair value model.)  Instructions Prepare the journal entries for the following events and transactions. (1) Acquisition on January 1, 2020 (2) Fair value of the building is $1,300 on December 31, 2020 (3) Fair value of the building is $1,100 million on December 31, 2021 (4) Fair value of the…

During the current year, USACo (a domestic corporation) sold equipment to FrenchCo, a non-U.S. corporation, for $350,000 with title passing to the buyer in France. USACO purchased the equipment several years ago for $100,000 and took $80,000 of depreciation deductions on the equipment, all of which were allocated to U.S.-source income. USACo's adjusted basis in the equipment is $20,000 on the date of sale. What is the sourcing of the $330,000 gain on the sale of this equipment? a. $250,000 foreign source and $80,000 U.S. source. b. $250,000 U.S. source and $80,000 foreign source. c. $330,000 foreign source. d. $330,000 U.S. source. 0000

Panama Company acquired 60 %of Samoa Corporation on 1/2018. Fair values of Samoa's assets and liabilitiesapproximated book values on that date. Panama uses the initial value methodto account for its investment in Samoa.On 1/2019, Panama bought equipment from Samoa for $60,000 that hadoriginally cost Samoa $120,000 and had $ 90,000of Accumulated depreciation at the time. The equipment had a five-yearremaining life and was being depreciated using the straight line method.You are preparing the worksheet for the 2020 fiscal year.d. How much excess depreciation will there be in each of the first five yearsafter the transfer?e. Panama's 2020 net income, without including any investment income, was$ 360,000 and Samoa reported net income of $ 115,000 in 2020.What consolidated income will be reported before removing the noncontrollinginterest's share of the subsidiary's net income? (This includes the effectof the ED entry.)f. What will the noncontrolling interest's share of the subsidiary's net…

On September 1, 2019, Winans Corporation acquired Aumont Enterprises for a cash payment of £800,000. At the time of purchase, Aumont’s statement of financial position showed assets of £600,000, liabilities of £200,000, and equity of £400,000. The fair value of Aumont’s assets is estimated to be £800,000. Compute the amount of goodwill acquired by Winans.

B Ltd owns various apartment blocks as investment property in terms of IAS 40 – Investmentproperty. On 1 October 2021, B Ltd decided to sell one of its commercial properties - AlphaBlock.This property had a fair value of R15 million and was reflected as such in the financial statementsdated 31 December 2020. The fair value on 1 October 2021 was R17.5million. The directors haddecided to redevelop the Alphablock before selling it. B Ltd measures all investment propertyusing the fair value method.Required:• Explain how B Ltd should classify Alphablock in the financial statements up until 1 October2021 and how, if at all, this would change thereafter.• As part of your explanation, state at what value Alphablock should be reflected in thefinancial statements at both 1 October 2021 and thereafter

ABC Corporation purchased XYZ Inc. The latter has the following account balances:   The noncurrent assets have a fair value of P4,500,000. ABC paid the owners of XYZ a total purchase price of P4,500,000. How much is the goodwill that ABC should record from this acquisition?    *refer to attached photo

Pin Corporation, a U.S. companyformed a British subsidiary on January 12023 by investing 450,000 British pounds () in exchange for all of the subsidiary's common stock. The British subsidiarySkin Corporationpurchased a real estate on April 1, 2023 at a cost of £500,000 with 100, 000 allocated to land and £400,000 allocated to a building. The building is depreciated over a 40-year estimated useful life on a straight line basis with no salvage value. Skin has beginning inventory of £60,000 and ending inventory of £80, 000. Purchases during the year amounted to £170,000. Ending inventory was acquired on September 20, 2023, and the FIFO inventory method is used. On November 1, 2023, Skin declared and paid dividends of £20,000. Exchange rates for the pound on various dates were: DateExchange Rate January 1, 2023 |f=\$1.50 April 12023 1f = \$1.54 September 20 2023 1f = \$1.56 November 1 2023 1f = \$1.52 2023 average rate 1f = \$1.55 December 31, 2023 1 f = \$1.60Based on the above…

Llungby AB spent 1,000,000 krone in 2020 on the development of a new product. The company determined that 25 percent of this amount was incurred after the criteria in IAS 36 for capitalization as an intangible asset had been met. The newly developed product is brought to market in January 2021 and is expected to generate sales revenue for five years.   Assume that Llungby AB is a foreign company using IFRS and is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes.   Required: Prepare journal entries for development costs for the years ending December 31, 2020, and December 31, 2021, under (1) IFRS and (2) U.S. GAAP. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, and December 31, 2021, conversion worksheets to convert IFRS balances to U.S. GAAP.