24. On January 1, 2023, Hannah Company purchased 10% of Esther Company's outstanding ordinary shares for P7,400,000. Hannah Company is the largest single shareholder in Esther Company and Hannah Company's officers are a majority on Esther Company's board of directors. Esther Company reported net income of P9,250,000 for the current year and paid dividends of P2,775,000. On December 31, 2023, what amount should the investment be reported? a. 7,122,500 b. 7,400,000 8,047,500 d. 8,325,000
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- 2. On January 1, 2018, Noah Company purchased 10% of Sabina Company’s outstanding ordinary shares for P4,000,000. Noah is the largest single shareholder in Sabina and Noah’s officers are a majority of Sabina’s board of directors. Sabina reported net income of P5,000,000 for 2018 and paid dividends of P1,500,000. In its December 31, 2018 statement of financial position, what amount should Noah report as investment in Sabina?. Min Hyun Jing Ltd. purchased 21,600 common shares of Glastone Ltd. on January 1, 2018, when the market price was $27.50 per share. This gave Min Hyun Jing 12% of the shares issued by Glastone Ltd. Min Hyun Jing Ltd. has a December 31 year end. For the year ended December 31, 2018, Glastone reported net income of $260,000 and declared dividends of $1.10 per share on December 31. The trading price of Glastone’s shares on that date was $31.20. For the year ended December 31, 2019. Glastone reported net income of $280,000 and declared dividends of $1.15 per share on December 31. The trading price of Glastone’s shares on December 31 was 34.60. Min Hyun Jing Ltd. purchased an additional 20,000 common shares on this date. For the year ended December 31, 2020, Glastone reported a net loss of $80,000, but still declared dividends on December 31, in the amount of $0.75 per share. The trading price of Glastone’s shares on December 31, 2019 was $30.50 per share. For the year ended…On January 1, 2020, Chico Company purchased 10% of Winona Company’s outstanding ordinary shares for P200,000. Chico Company is the largest single shareholder in Winona Company and the officers of Chico Company are the majority members of Winona Company’s board of directors. Winona Company reported a profit of P1,500,000 for 2020 and paid dividends of P900,000. The market value of Winona Company’s ordinary shares on December 31, 2020, is P265,000. In its December 31, 2020, statement of financial position, what amount should Chico Company report as an investment in Winona Company?
- Handley Ltd. acquired 42% of the common shares of Lecce Ltd. on January 1, 2024, by paying $5.68 million for 142,000 shares. Lecce declared a cash dividend of $0.60 per share in each quarter that Handley received on March 20, June 20, September 20, and December 20. Lecce reported net income of $1.42 million for the year. At December 31, the market price of the Lecce shares was $44 per share.On January 1, 2023, EE Company acquired 70,000 shares, representing 20% of the outstanding shares of WW Limited, at a price of $10 per share. On July 31, 2023, WW declared and paid a dividend of $1 per share. WW's net income for 2023 was $1,250,000. On December 31, 2023, the shares of WW were trading on the Toronto Stock Exchange at $14 per share. Required EE is not sure how to report its investment in WW shares. Using the following format, indicate the amounts that would appear on the balance sheet and the statement of comprehensive income for 2023 if the investment (a) has been irrevocably elected to be measured at fair value through OCI, (b) is classified as FVPL, or (c) is an associate. Complete the balance sheet in the following table. (For entries with a $0 balance, make sure to enter "0" in the appropriate column.) Balance sheet Investment in WW shares Fair value through OCI election FVPL AssociateHeidebrecht Design acquired 25% of the outstanding common stock of Sunland Company on January 1, 2022, by paying $854,000 for the 42,700 shares. Sunland declared and paid $0.30 per share cash dividends on March 15, June 15, September 15, and December 15, 2022. Sunland reported net income of $390,500 for the year. At December 31, 2022, the market price of Sunland common stock was $26 per share. (a) Prepare the journal entries for Heidebrecht Design for 2022 assuming Heidebrecht Design cannot exercise significant influence over Sunland. (Use the cost method.) (Record journal entries in the order presented in the problem. List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit
- On January 2, 2020, Samantha Company bought 10% of Camille Company's outstanding ordinary shares for $400,000. Samantha Company is the largest single shareholder in Camille Company, and Samantha Company's officers are a majority on Camille Company's board of directors. Camille Company reported net income of $500,000 for 2020, and paid dividends of P150,000. In its December 31, 2020 balance sheet, what amount should Samantha Co. report as investment in Camille Co.?On January 2, 2022, MAMBA Inc. purchased 5,000 shares of the 20,000 shares outstanding of BLACK Corporation stock for P15,000. The following information was reported by BLACK during 2022: Net Income P45,000 Dividends P1.75 per share Market Price, 12/31/18 P2.50 per share MAMBA, Inc. sold all of its BLACK Corporation stock on January 15, 2023, for P3.10 per share. Compute the carrying amount PER SHARE of the Investment. The amount of gain or loss MAMBA, Inc. should report on the sale isPresented below are two independent situations. (1) Grand Cosmetics acquired 10% of the 200,000 ordinary shares of Cey Fashion at a total cost of $12 per share on March 18, 2020. On June 30, Cey declared and paid a $60,000 dividend. On December 31, Cey reported net income of $110,000 for the year. At December 31, the market price of Cey Fashion was $15 per share. The shares are classified as non-trading. (2) Unruh, Inc. obtained significant influence over Olsen Corporation by buying 25% of Olsen's 40,000 outstanding ordinary shares at a total cost of $7 per share on January 1. 2020. On June 15, Olsen declared and paid a cash dividend of $30,000. On December 31. Olsen reported a net income of SS0.000 for the year. Instructions Prepare all the necessary journal entries for 2020 for (a) Grand Cosmetics and (b) Unruh, Inc
- . On January 1, 2020, Santos Ltd. purchased 30% of Yardley Co.'s 50,000 outstanding common shares at a price of $20 per share. This price is based on Yardley's net assets. On June 30, Yardley declared and paid a cash dividend of $60,000. On December 31, 2020, Yardley reported net income of $120,000 for the year. At this time, the shares had a fair value of $23. Santos's year-end is December 31. Required: a. Assuming that Santos does not have any significant influence over Yarder, prepare all the 2020 entries relating to this investment using the FVTPL classification. b. Prepare all the 2020 entries relating to this investment if it was classified as cost due to no active markets. c. Prepare all the 2020 entries relating to this investment assuming that Santos has significant influence over Yarder. Santos uses the equity method of accounting. (Ctrl) -On January 1, 2022, Mojito Corporation purchased 20% (20,000 shares) of the outstanding stock of Dulcinea Corporation for $153,000. During 2022, Dulcinea Corporation paid total dividends of $45,000 and earned $80,000 in net income. At the end of 2022, Dulcinea Corporation’s stock had a fair market value of $155,000. Required: Prepare the journal entries that Mojito would make during 2022 assuming that they do NOT have significant influence over Dulcinea as a result of their stock ownership (i.e. fair value method). Prepare the journal entries that Mojito would make during 2022 assuming that they do have significant influence over Dulcinea as a result of their stock ownership (i.e. equity method).On January 1, 2023, Evans Company purchased 40% of Farley Corporation’s 800,000 outstanding shares of common stock at a cost of $35 per share. On July 15, Farley declared and paid a cash dividend of $1.50 per share. On December 31, Farley reported a net income of $2,860,000 for the year and the market price of its common stock was $42 per share. Prepare all journal entries for 2023.