The machinery has a remaining useful life of 5 years. Mobi Co.'sdividends of P500,000 in 20x1. How much are the (1) impliedgoodwill (negative goodwill) on the investment; (2) share in theNALof Black Coling sharesir values. Ied and paidrevaluationfor the yeCo. reportin associa4. On January 1, 20x1, Arco Co. acquired 20% interest in MobiCo. for P1,600,000. On this date, the carrying amounts of MobiCo.'s assets and liabilities approximate their fair values exceptfor the following:InventoryMachineryCarrying amountFair value300,0001,800,000400,0001,500,000ai equity, at book value, was P8,000,000 on Jan. 1, 20x1. Mobieported profit of P3,000,000 and declared and paid cash0.0000,000will (negative goodwill) on the investment; (2) share in the Chapter 14Investassociate's profit in 20x1; and (3) carrying amount of theinvestment in associate on Dec. 31, 20x1?a. 40,000; 592,000; 2,029,000b. 50,000; 750,000; 2,255,000c. (40,000); 632,000; 2,132,000d. 40,000; 592,000; 2,092,000

An associate is the one whose 20% to 50% shares are held by another company. Such a company has…

4. On January 1, 20x1, Arco Co. acquired 20% interest in Mobi Co. for P1,600,000. On this date, the carrying amounts of Mobi Co.'s assets and liabilities approximate their fair values except for the following: Fair value Carrying amount 300,000 400,000 Inventory Machinery 1,800,000 1,500,000 e machinery has a remaining useful life of 5 years. Mobi Co.'s total equity, at book value, was P8,000,000 on Jan. 1, 20x1. Mobi Co. reported profit of P3,000,000 and declared and paid cash dividends of P500,000 in 20x1. How much are the (1) implied goodwill (negative goodwill) on the investment; (2) share in the

4. On January 1, 20x1, Arco Co. acquired 20% interest in Mobi Co. for P1,600,000. On this date, the carrying amounts of Mobi Co.'s assets and liabilities approximate their fair values except for the following: Fair value Carrying amount 300,000 400,000 Inventory Machinery 1,800,000 1,500,000 e machinery has a remaining useful life of 5 years. Mobi Co.'s total equity, at book value, was P8,000,000 on Jan. 1, 20x1. Mobi Co. reported profit of P3,000,000 and declared and paid cash dividends of P500,000 in 20x1. How much are the (1) implied goodwill (negative goodwill) on the investment; (2) share in the

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

AAA acquired a 70% interest in BBB on January 2, 20x1 for $468,000 when BBB net assets had a book value and fair value of $790,000. During 20x1, AAA sold inventory items that cost $780,000 to BBB for $1,040,000 and BBB's inventory at December 31, 20x1 included 1/2 of the merchandise. BBB also sold to AAA an inventory for $15,000 with a cost of $12,500, 70% were sold to unaffiliated customers. AAA reported separate income from its own operation of $585,000 and BBB reported a net loss of P390,000. Compute for the consolidated net income.
1. PKT Ltd acquired 80% of the ordinary shares of CF Ltd. The net assets were fairly valued on 1 January 2021 except for machinery that were undervalued by R550 000. The machine was purchased on 1 January 2020 for R1 250 000 and had a useful life of 5 years. No adjustments at acquisition for the above matter. Required: Prepare the journal entries (with narrations) for the year ended 31 December 2022. Assume a tax Rate of 30% 1.2. PKT Ltd wanted to achieve a 25% GP for each sale completed. Inventory sales between AB and CF Ltd amounted to R1875 000 for the year ended 31 December 2022. Inventory on hand in CF Ltd previously Purchased from PKT Ltd: R620 000 (31 December 2022) R750 000 (31 December 2021) Required: Prepare the journal entries (with narrations) for the year ended 31 December 2022. Assume a tax rate of 30%.
On Jan 1, 20X1, Ouyang Inc paid $1,000,000 to acquire 70% of Huang Inc when Huang's BV was $500,000. And the 30% of non-controlling interest(NCI)'s fair value was $300,000. At the acquisition date, Huang's equipment was understated by $50,000 with a 5 vear remaining life; Patents was underreported by 60,000 with a 6 year remaining life; trademarks was overvalued by $10,000 with a remaining life of 5 years. Three years later, Huang Inc reports the following information. Ouyang Inc Huang Inc Current assets Equipment Trademarks $300,000 $320,000 250,000 150,000 210,000 140,000 200,000 280,000 100,000 320,000 Patents 150,000 Liabilities Revenues Expenses 340,000 450,000 180,000 What is the consolidated balance of trademarks today?
ABC Corporation acquired 70 percent of XYZ Corporation on August 1 for P420,000. On that date, XYZ Corporation had the following book values and market values. What is the amount of non-controlling interest on the acquisition date consolidated balance sheet? * Book Value P40,000 170,000 Market Value P40,000 230,000 700,000 Cash Inventory Plant Assets (net) Cost of Goods Sold 620,000 220,000| 60,000 Depreciation Expense Liabilities (300,000) (10,000) (450,000) (350,000) (300,000) Common Stock Retained Earnings Sales Your answer
P Corp acquired 90% of the outstanding ordinary share of B Company. On March 31, 2030, P sold equipment to B Company costing P150,000, with accumulated depreciation of P30,000 for P100,000. The remaining useful life of the equipment is four years. On September 30, 2030, B sold machinery with carrying amount of P200,000 for P240,000. The remaining useful life of the machine is five years. On December 31, 2030, P and B reported net income from their own operation amounting to P1,000,000 and P600,000, respectively. B also paid dividend of P200,000. Requirements: 1. non-controlling interest in net income for 2030? 2. consolidated net income attributable to parent for 2030?
SFFN Corp. purchased the entire business of AZC, Inc. including all its assets and liabilities for $1,800,000. Below is information related to the two companies: SFFN AZC Fair value of assets $ 3,050,000 $ 1,600,000 Fair value of liabilities 2,575,000 800,000 Reported assets 2,800,000 1,400,000 Reported liabilities 2,500,000 750,000 Net Income for the year 460,000 250,000 How much goodwill will SFFN recognize as a result of its acquisition of AZC? Select one: a. $-0- b. $1,225,000 c. $1,150,000 d. $200,000 e. $1,000,000
People Co. acquired 80% of Steeple Co.'s common stock for $10,000,000 in cash on Jan. 2, 20x1. At that date, Steeple's 56,000,000 of net assets were fairly stated, except for an unrecorded intangible asset, favorable leases, with a $1,000,000 value (useful life of 10 years, straight-line amortization). The estimated fair value of the noncontrolling interests at the acquisition date was $2,000,000. People Co. accounts for its investment in Steeple Co. using the equity method. There are no intra-entity transactions and both firms are in the U.S.A It is now December 31, 20x3. Steeple reported net income of $250,000 for the current year, and declared and paid $40,000 in dividends. There were no impairments of Steeple's assets in 20x1, 20x2 or but goodwill is impaired by $100,000 in 20x3. Show consolidating entry R (relates to recognizing revalued assets and liabilities) that would be needed to present consolidated financial statements for 20x3.
7. ABC Corporation acquired 70 percent of XYZ Corporation on August 1 for P420,000. On that date, XYZ Corporation had the following book values and market values. What is the amount of non-controlling interest on the acquisition date consolidated balance sheet?
Compute for the consolidated cost of goods sold.
Professor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20X4, fr $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies Included the following amounts as of the date of acquisition: Item Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation. Investment in Scholar Corporation Total Assets Accounts Payable Mortgage Payable Common Stock Retained Earnings Total Liabilities & Stockholders' Equity Professor Corporation $ 50,300 90,000 Scholar Corporation $21,000 44,000 130,000 75,000 60,000 30,000 410,000 250,000 (150,000) (80,000) 102,200 $ 692,500 $340,000 $ 152,500 $ 35,000 250,000 180,000 80,000 40,000 210,000 85,000 $ 692,500 $340,000 At the date of the business combination, the book values of Scholar's assets and liabilities approximated fair value except for Inventory, which had a fair value of $81,000, and…
On January 1, 20X1, P sells an equipment with P20,000 book value to its subsidiary S for P30,000. S intends to use the equipment for 4 years. On December 31, 20x2, S sells the equipment to an outside party for P14,000. What amount of gain or (loss) for sale of equipment is reported on the consolidated financial statements? A. Gain 14,000 B. Loss 6,000 C. Loss 1,000 D. Gain 4,000
Parent Corporation acquired 80% of Subsidiary Co. for P 5,000,000 on January 2, 2021. On this date, Subsidiary Co. reported Ordinary share capital of P 3,000,000 and Retained Earnings of P2,000,000. Investment is accounted for using the cost method. Change in assets to fair values were undervaluation of P 300,000 and P400,000 in Equipment and Building respectively. Both assets have 10-year remaining useful life. An annual review revealed that goodwill has not been impaired.Subsidiary Co. earned income and paid dividends as follows: 2021 2022 2023Net Income 1,000,000 1,200,000 1,3000,000Dividends 400,000 500,000 600,000The balance of the investment account at December 31, 2023 is: a. P5,924,000 b. P5,000,000 c. P5,744,000 d. P7,660,000