ABC Inc. purchased 35,000 voting shares out of 123 Inc.'s 50,000 outstanding voting shares for $350,000 on January 1, 2020. On the date of acquisition, 123's common shares and retained earnings were valued at $120,000 and $180,000, respectively. 123's book values approximated its fair values on the acquisition date with the exception of a patent and a trademark, neither of which had been previously recorded. The fair values of the patent and trademark on the date of acquisition were $30,000 and $20,000 respectively. On January 2, 2020, ABC sold 7,000 shares of 123 on the open market for $57,750. ABC Inc. uses the equity method to account for its investment in 123 Inc. What is the carrying value of the trademark after the sale? A. $12,600 B. $18,000 C. $20,000 D. $30,000
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- Parent Inc. purchased 60,000 of the outstanding (specified below) voting shares of Sub, for $625,000 (the total number of outstanding shares varies in the questions below) on January 1, 2021. On the date of acquisition, Sub's common shares and retained earnings were valued at $235,000 and $280,000, respectively. Subs book values approximated its fair values on the acquisition date with the exception of a patent, for which the fair value of the patent was $40,000 greater than book value. Q: Assume that the total number of outstanding shares for Sub was, 78,000 (remember Parent purchased 60,000). On January 2, 2021, Parent sold 12,000 shares of Sub on the open market for $108,000. What would be the amount of the gain or loss on the sale of these shares?Reuniclus Company acquired 55% of the outstanding common stock of Vanillite Company on August 1, 2019 at a total cost of P5,005,000. At acquisition date, Vanillite 's common stock and retained earnings amounted to P200,000 and P4,800,000, respectively. All of Vanillite 's assets and liabilities had fair values equal to book values as of the acquisition date except for patents which had a fair value of P1,800,000.and a book value of P400,000. Reuniclus had an inventory with a fair value of P800,000 and a carrying amount of P700,000. All inventories was sold at the end of the year. The patents have a remaining life of five years. For 2019, Vanillite had a net income of P1,600,000, incurred evenly and Reuniclus had a net income of P2,000,000.Compute the net income attributable to the non-controlling interest? A. P202,500 B. P247,500 C. Answer not given D. P549,000 E. P594,000On January 1, 2023, Novak Corporation, a public company following IFRS, acquired 15,900 of the 53,000 outstanding common shares of Noah Corp. for $22 per share. Noah's statement of financial position reported the following information at the date of the acquisition: Assets not subject to depreciation $289,800 Assets subject to depreciation 860,100 Liabilities 150,100 Additional information: 1. On the acquisition date, the fair value is the same as the carrying amount for the assets that are not subject to depreciation and for the liabilities. 2. 3. 4. On the acquisition date, the fair value of the assets that are subject to depreciation is $964,100. These assets had a remaining useful life of eight years at that time. Noah reported 2023 net income of $104,000 and paid dividends of $5,000 in December 2023. Noah's shares are not actively traded on the stock exchange, but Novak has determined that they have a fair value of $21 per share on December 31, 2023. (a) Your answer is partially…
- On July 19, 2021, SUNOB acquired 60% of the outstanding shares of YSAE. The business combination resulted to a gain on bargain purchase of P200,000. The consideration paid was exactly the fair value for the 60% outstanding stocks, and the fair value of the non-controlling interest is not given. Fair value of the net assets of YSAE amounted to P1,000,000 on that date. How much is the gain on acquisition attributable to SUNOB? a. 600,000 b. 120,000 c. Zero d. 200,000On July 19, 2021, SUNOB acquired 60% of the outstanding shares of YSAE. The business combination resulted to a gain on bargain purchase of P200,000. The consideration paid was exactly the fair value for the 60% outstanding stocks, and the fair value of the non-controlling interest is not given. Fair value of the net assets of YSAE amounted to P1,000,000 on that date. How much is the gain on acquisition attributable to SUNOB? Group of answer choices a.600,000 b.120,000 c.Zero d.200,000On January 1, 2022, Pacer Corporation (Pacer) acquired 80% of Sprint Ltd. (Sprint) Corp. for $500,000. Please uses the cost method to account for its investment. On January 1, 2022, Sprint's retained earnings and common shares were $350,000 and $110,000, respectively. Sprint's book values did not differ materially from its fair values on the date of acquisition with the following exceptions: • Inventory had a fair value that was $20,000 higher than its book value. This inventory was sold to outsiders during 2022. • A patent (which had not previously been accounted for) was identified on the acquisition date with an estimated fair value of $15,000. The patent had an estimated useful life of 3 years. The financial statements of Pacer and Sprint for the year ended December 31, 2023 are shown below: Income Statements Pacer Corporation Sprint Ltd. Sales $500,000 $300,000 Other revenues 300,000 120,000 Less: expenses Cost of goods sold 400,000 240,000 Depreciation/amortization…
- Allison Corporation acquired all of the outstanding voting stock of Mathias, Incorporated, on January 1, 2023, in exchange for $6,059,500 in cash. Allison intends to maintain Mathias as a wholly owned subsidiary. Both companies have December 31 fiscal year-ends. At the acquisition date, Mathias’s stockholders’ equity was $2,045,000 including retained earnings of $1,545,000. At the acquisition date, Allison prepared the following fair-value allocation schedule for its newly acquired subsidiary: Consideration transferred $ 6,059,500 Mathias stockholders' equity 2,045,000 Excess fair over book value $ 4,014,500 to unpatented technology (8-year remaining life) $ 872,000 to patents (10-year remaining life) 2,590,000 to increase long-term debt (undervalued, 5-year remaining life) (145,000) 3,317,000 Goodwill $ 697,500 Postacquisition, Allison employs the equity method to account for its investment in Mathias. During the two years following the business…Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January 1, 2020, in exchange for $6,162,000 in cash. Allison intends to maintain Mathias as a wholly owned subsidiary. Both companies have December 31 fiscal year-ends. At the acquisition date, Mathias’s stockholders’ equity was $2,070,000 including retained earnings of $1,570,000. At the acquisition date, Allison prepared the following fair-value allocation schedule for its newly acquired subsidiary: Consideration transferred $ 6,162,000 Mathias stockholders' equity 2,070,000 Excess fair over book value $ 4,092,000 to unpatented technology (8-year remaining life) $ 912,000 to patents (10-year remaining life) 2,640,000 to increase long-term debt (undervalued, 5-year remaining life) (170,000 ) 3,382,000 Goodwill $ 710,000 Postacquisition, Allison employs the equity method to account for its investment in…On January 1, 2021, Brooks Corporation exchanged $1,180,500 fair-value consideration for all of the outstanding voting stock of Chandler, Inc. At the acquisition date, Chandler had a book value equal to $972,500. Chandler’s individual assets and liabilities had fair values equal to their respective book values except for the patented technology account, which was undervalued by $330,000 with an estimated remaining life of six years. The Chandler acquisition was Brooks’s only business combination for the year. In case expected synergies did not materialize, Brooks Corporation wished to prepare for a potential future spin-off of Chandler, Inc. Therefore, Brooks had Chandler maintain its separate incorporation and independent accounting information system as elements of continuing value. On December 31, 2021, each company submitted the following financial statements for consolidation. Dividends were declared and paid in the same period. Brooks Corp. Chandler Inc. Income…
- On January 2, 2021, ABC Co. acquired 80% of XYZ Co. ordinary shares for P810,000. An amount of P37,500 of the excess is attributable to goodwill and the balance to a depreciable assets with an economic life of ten years. NCI is measured at fair value on the date of acquisition. On the date of acquisition, shareholder's equity accounts of the two entities were as follows: АВС Ordinary Shares - 1,312,500 Retained Earnings - 1,950,000 XYZ Ordinary Shares - 300,000 Retained Earnings - 525,000 On December 31, 2021, XYZ reported net income of 131,250 and paid dividends of P172,500. Goodwill have been impaired and should be reported at P7,500 on December 31, 2021. #6. What is the non-controlling interest in profit of XYZ on December 31, 2021? Select the correct response: 26,250.00 17,250.00 23,250.00 23,437.50On January 1, 2024, Brooks Corporation exchanged $1,194,000 fair-value consideration for all of the outstanding voting stock of Chandler, Incorporated. At the acquisition date, Chandler had a book value equal to $1,150,000. Chandler’s individual assets and liabilities had fair values equal to their respective book values except for the patented technology account, which was undervalued by $216,000 with an estimated remaining life of six years. The Chandler acquisition was Brooks’s only business combination for the year. In case expected synergies did not materialize, Brooks Corporation wished to prepare for a potential future spin-off of Chandler, Incorporated. Therefore, Brooks had Chandler maintain its separate incorporation and independent accounting information system as elements of continuing value. On December 31, 2024, each company submitted the following financial statements for consolidation. Dividends were declared and paid in the same period. Accounts Brooks Corporation…On January 1, 2023, Palka, Incorporated, acquired 70 percent of the outstanding shares of Sellinger Company for $1,232,700 in cash. The price paid was proportionate to Sellinger's total fair value, although at the acquisition date, Sellinger had a total book value of $1,490,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger's accounting records by $261,000. On January 1, 2024, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $511,875 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger. During the two years following the acquisition, Sellinger reported the following net income and dividends: Items Net income Dividends declared 2023 $ 570,000 160,000 Required A Required B $ Required: a. Show Palka's journal entry to record its January 1, 2024, acquisition of an additional 25…