1. On May 1, 2020, Dale Company issued a 10% share On January 1, 2020, Jam Company reported as long-term investmonts the following unquoted equity shares: Dale Company, 5,000 ordinary shares (1% interest) Ever Company, 10,000 ordinary shares ( 2% interest) Fox Company, 25,000 ordinary shares (10% interest) 1,250,000 1,600,000 2,000,000 dividend. 2. On November 1, 2020, Dale Company paid a cash dividend of P20 per share. 3. On January 1, 2020, Jam Company paid P5,000,000 for 50,000 additional ordinary shares of Fox Company which represented a 20% investment in Fox Company. The fair value of all of Fox's identifiable assets net o liabilities was equal to their carrying amount o P20,000,000. Jam Company's initial 10% interest of 25,000 ordinar shares of Fox Company was acquired on January 1, 201 for P2,000,000. The 10% interest was accounted for unler cost methoc On January 1, 2020, this 10% existing interest had a fa value of P2,400,000.. 4 Fox Company reported net income of P6,000,000 for 202 and paid dividend of P20 per share on December 31, 202
1. On May 1, 2020, Dale Company issued a 10% share On January 1, 2020, Jam Company reported as long-term investmonts the following unquoted equity shares: Dale Company, 5,000 ordinary shares (1% interest) Ever Company, 10,000 ordinary shares ( 2% interest) Fox Company, 25,000 ordinary shares (10% interest) 1,250,000 1,600,000 2,000,000 dividend. 2. On November 1, 2020, Dale Company paid a cash dividend of P20 per share. 3. On January 1, 2020, Jam Company paid P5,000,000 for 50,000 additional ordinary shares of Fox Company which represented a 20% investment in Fox Company. The fair value of all of Fox's identifiable assets net o liabilities was equal to their carrying amount o P20,000,000. Jam Company's initial 10% interest of 25,000 ordinar shares of Fox Company was acquired on January 1, 201 for P2,000,000. The 10% interest was accounted for unler cost methoc On January 1, 2020, this 10% existing interest had a fa value of P2,400,000.. 4 Fox Company reported net income of P6,000,000 for 202 and paid dividend of P20 per share on December 31, 202
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![On January 1, 2020, Jam Company reported as long-term
investments the following unquoted equity shares:
ar
at
Dale Company, 5,000 ordinary shares (1% interest)
Ever Company, 10,000 ordinary shares ( 2% interest)
Fox Company, 25,000 ordinary shares (10% interest)
1,250,000
1,600,000
2,000,000
T
3
1. On May 1, 2020, Dale Company issued a 10% share
dividend.
2. On November 1, 2020, Dale Company paid a cash dividend
of P20 per share.
3. On January 1, 2020, Jam Company paid P5,000,000 for
50,000 additional ordinary shares of Fox Company which
represented a 20% investment in Fox Company.
The fair value of all of Fox's identifiable assets net of
liabilities was equal to their carrying amount of
P20,000,000.
Jam Company's initial 10% interest of 25,000 ordinary
shares of Fox Company was acquired on January 1, 2019
for P2,000,000.
The 10% interest was accounted for unler cost method.
On January 1, 2020, this 10% existing interest had a fair
value of P2,400,000.
Fox Company reported net income of P6,000,000 for 2020,
and paid dividend of P20 per share on December 31, 2020.
Required:
a. Compute the goodwill arising from acquisition on January
1, 2020.
b. Prepare journal entries for 2020.
Present the investments in equity securities on December
31, 2020.
с.
512](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe2cd62d0-0485-463b-8921-224a57eb77a8%2F406c1c50-de96-48ec-828d-3020cbbd2e0b%2Fs4xeyt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 1, 2020, Jam Company reported as long-term
investments the following unquoted equity shares:
ar
at
Dale Company, 5,000 ordinary shares (1% interest)
Ever Company, 10,000 ordinary shares ( 2% interest)
Fox Company, 25,000 ordinary shares (10% interest)
1,250,000
1,600,000
2,000,000
T
3
1. On May 1, 2020, Dale Company issued a 10% share
dividend.
2. On November 1, 2020, Dale Company paid a cash dividend
of P20 per share.
3. On January 1, 2020, Jam Company paid P5,000,000 for
50,000 additional ordinary shares of Fox Company which
represented a 20% investment in Fox Company.
The fair value of all of Fox's identifiable assets net of
liabilities was equal to their carrying amount of
P20,000,000.
Jam Company's initial 10% interest of 25,000 ordinary
shares of Fox Company was acquired on January 1, 2019
for P2,000,000.
The 10% interest was accounted for unler cost method.
On January 1, 2020, this 10% existing interest had a fair
value of P2,400,000.
Fox Company reported net income of P6,000,000 for 2020,
and paid dividend of P20 per share on December 31, 2020.
Required:
a. Compute the goodwill arising from acquisition on January
1, 2020.
b. Prepare journal entries for 2020.
Present the investments in equity securities on December
31, 2020.
с.
512
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