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X Company purchased a (100%) controlling interest in Y Company by issuing $2,000,000 worth of common shares. The business combination agreement has an earnout clause that states the following: X Company would pay 10% of any earnings in excess of $750,000 to Y's shareholders in the first year following the acquisition. On acquisition date, X's shares had a market value of $80 per share.Required:a) Assuming that Y's net income in the first year following the acquisition was $950,000, prepare any journal entries (for X Company) that are necessary to reflect Y's results under IFRS 3 Business Combinations.b) Assuming that the agreement called for Y's shareholders to be compensated with 1,250 shares for any decline in X's share price, what journal entries would be required under IFRS 3, if the market value of X's shares dropped to $64 within the year?

P Company acquires 15% of S Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, P purchases another 60% of S's ordinary shares for P2,160,000. At that date, S Company reports identifiable assets with a book value of P3,900,000 and a fair value  of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. WHAT IS THE AMOUNT OF THE: Goodwill arising from the consolidation if it is to be computed using the proportionate basis or “Partial Goodwill” Goodwill arising from the consolidation if it is to be computed using the full (fair value basis of “Full/Gross-up” Goodwill arising from the consolidation if The fair value of the 25% non controlling interest in Subsidiary Company is P890,000.

4 TRICKY Company acquires 25% of JOKER Corporation’s ordinary shares for P190,000 cash and carries the investment using the cost method. After one quarter, TRICKY Company purchases another 60% of JOKER Corporation’s ordinary shares for P540,000. On this date, JOKER Corporation reports identifiable net assets with carrying value of P720,000 and fair value of P920,000. The liabilities of JOKER Corporation has a book value and fair value of 280,000. The fair value of the 15% controlling interest is P125,000.   How much is the goodwill or gain on acquisition? Group of answer choices 17,000 gain on acquisition 250,000 gain on acquisition 250,000 goodwill 17,000 goodwill

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Dragon Corporation acquired a 35% interest in Roger Inc. for $350,000 on January 1 of the current year. Specifically, Dragon acquired 63,000 of the 180,000 voting common shares outstanding. Roger reported net income of $210,000 at the end of the current year and paid cash dividends of $32,000 during the current year. At the time of acquisition, the book value of Roger's net assets equaled its market value. Roger's shares were selling for $15 per share at the end of the current year. Read the requirements. Requirement a. Prepare all journal entries required to record the transactions indicated assuming that Dragon uses the equity method. (Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining cells in the table blank.) Record Dragon Corporation's acquisition of a 35% share of Roger Inc. on January 1 of the current year. Equity Method Account…

Wooden Reed Inc. (WRI) issued 30,000 voting common shares to acquire all of the assets and liabilities of Creative Instrument Ltd. (CIL). On the acquisition date, WRI's shares were trading at $21.83 per share. After the transaction, CIL owned 20% of WRI's outstanding shares. Below are the statements of financial position of both companies immediately before the transaction, along with the fair values of CIL's assets and liabilities: WRI CIL Cash Accounts receivable Inventory Property, plant, equipment (net) Current liabilities Long-term debt Common shares Retained earnings $754,900 ■ $919,900 $265,000 O $100,000 S carrying value 75,000 CA 180,000 220,000 880,000 $ 1,355,000 $ 75,000 235,000 100,000 945,000 $ 1,355,000 If the consolidated statement of financial position was created immediately after the acquisition, the consolidated 2. common share account will be: A TTİNEN carrying value $ 35,000 TRT- 67,500 10 125,000 S climi 1 temagam de - SAM A TRILOŽ B 350,000 $ 577,500 $ 25,000…

Pizza Corporation purchased 100 percent of the common stock of Slice Corporation on January 1, 20X2, by issuing 49,000 shares of its $6 par value common stock. The market price of Pizza’s shares at the date of issue was $26. Slice reported net assets with a book value of $1,197,000 on that date. The amount paid in excess of the book value of Slice’s net assets was attributed to the increased value of patents held by Slice with a remaining useful life of 7 years. Slice reported net income of $69,000, paid dividends of $24,000 in 20X2, reported a net loss of $57,000, and paid dividends of $14,000 in 20X3. Required: Assuming that Pizza Corporation uses the equity method in accounting for its investment in Slice Corporation, prepare all journal entries for Pizza for 20X2 and 20X3.

On January 1, 20x1, Entity A acquires 100% interest in entity B in exchange for Entity A’s 10,000 shares with par value per share of P20 and fair value of P200 per share. Entity B’s net identifiable assets have a fair value of P1,900,000. In addition, entity A agrees to issue additional 2,000 shares if entity B’s 20x1 profit will exceed P3,600,000. The fair value of the contingent consideration is P280,000.  Requirements: How much is the goodwill recognized on acquisition date? Entity B's 20x1 profit is P3,800,000. Entity A issues the additional shares on January 14, 20x2. Provide the journal entries. Entity B's 20x1 profit is P2,800,000. Provide the journal entries.

Prepare entries to record both the acquisition and the sale of these shares. 1. On May 20, Montero Company paid $198,000 to acquire 70 shares (5%) of ORD Corporation as a long-term investment. 2. On August 5, Montero sold one-tenth of the ORD shares for $22,000.

On January 1, 20X2, Parent Inc. issued 32,000 shares of its P10 par value common stock for all the outstanding shares of Son Company. The fair value of Parent Inc.'s stock is P25 per share. Parent Inc. pays P50,000 in registering the stocks. Given below are the statements of financial position (SFP) of the companies before the acquisition: Parent Inc. Statement of Financial Position January 1, 20X2 Assets Liabilities and Equity P210,000 420,000 400,000 500,000 505,000 P2,035,000 Cash P200,000 Accounts Payable 185,000 Bonds Payable 190,000 Common Stock, P10 par value 300,000 Additional Paid-In Capital (APIC) 740,000 Retained Earnings 420,000 Total Liabilities and Equity P2,035,000 Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets Son Company Statement of Financial Position January 1, 20X2 Book Value Fair Value P55,000 150,000 130,000 500,000 300,000 P1,135,000 Accounts Receivable Inventory Land P55,000 130,000 85,000 320,000…