Azucena Co, acquired all the assets and liabilities of Golf Co, for P2,600,000, Onacquisition date, Golf's identifiable assets and liabilities have fair values of P5,900,000and P3,500,000 respectively. Relevant information follows:a. Azucena is renting out a building to Golf Co, on an operating lease. The terms of thelease compared with market terms are favorable. The fair values of the differential isP90,000.b. Golf is a defendant on a pending lawsuit, No provision was recognized becauseAzucena's legal counsel believes they will successfully defend the case, The fair value ofsettling the lawsuit is P10,000.How much is the goodwill (gain on bargain purchase)?(do not use comma on the answer. Follow this format: P1 250 000)

Given: Fair Value Of assets : P5 900 000 Fair Value of Liabilities: P3 500 000 Fair Value of Lease:…

Answered: Azucena Co, acquired all the assets and…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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c) The information below relates to a leasing arrangement between Frankfield Leasing Company and Boswell Manufacturing Company, a lessee. Inception date Lease term (non cancellable) January 1, 2020 5 years Annual lease payment due at the beginning of each $28,500 year beginning January 1, 2020 Fair value of asset at January 1, 2020 Economic life of leased equipment $130,000 6 years Residual value of equipment at end of lease $25,270 term, unguaranteed by the lessee Lessor's implicit rate (not known by the lessee) 6% Lessee's incremental borrowing rate 8% The asset will revert to the lessor at the end of the lease term. There is an expected residual value of $25,270 which is unguaranteed by the lessee. The lessee uses the straight-line depreciation method for all equipment. (Round all figures to the nearest $1.)
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On 1 January 2016, company A owned an asset with a net book of RM 100000. The fair value of the asset on this date was RM 120000. On this date, company A sold the asset to Granite Bhd for RM 150000 and immediately leased back the asset for a period of 5 years. The leaseback is an operating lease. Explain how company A shall account for the sale and leaseback transaction and show the journal entries required.
Baillie Power leased high-tech electronic equipment from Courtney Leasing on January 1, 2024. Courtney purchased the equipment from Doane Machines at a cost of $253,000, its fair value. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Related Information: Lease term2years (8 quarterly periods)Quarterly lease payments $18,000on January 1, 2024, and on March 31, June 30, September 30, and December 31 thereafterEconomic life of asset5yearsInterest rate charged by the lessor8% Required: Prepare a lease amortization schedule and appropriate entries for Baillie Power from the beginning of the lease through December 31, 2024. December 31 is the fiscal year end for each company. Appropriate adjusting entries are recorded at the end of each quarter.
Use the same information in above, How much is the rental income to be recognized in the 2012 statement of comprehensive income of the buyer-lessor? a. P600,000 b. P329,272 c. P300,000 d. P270,728
On January 1, 2018, This Co., a lessor, sold an equipment that it had been leasing under direct financing lease. On the same date data relating to sale and lease follow: Sale price - P400,000 Gross lease receivable - 180,000 Unearned interest income - 30,000 Implicit rate - 12% How much is the gain (or loss) on the sale of the leased asset on January 1, 2017?
4. The following transactions occurred during 2020: a. Axis Oil Company and Alan Oil Company jointly purchased a 1,500-acre lease in Oklahoma for $48,000. Axis has a 55% WI and Alan has a 45% WI Axis will be the operator of the lease. b. Brady Oil Company owns 100% WI in a lease (with a 1/5 royalty interest), with capitalized costs of $500,000. Brady assigns the working interest to Fugate Oil for $900,000 and keeps an 18% overriding royalty interest. c. Brady Oil Company owns 100% WI in a lease (with a 1/7 royalty interest) in Oklahoma and transfers a 1/15 overriding royalty interest to the controller of the company. d. Bruce Oil Company owns the working interest in a lease in Nueces County, Texas and assigns 45% of the working interest to the Larson Oil Company in return for Larson drilling and equipping a well on the property. After the well is completed, Bruce and Larson will share revenues and costs. e. Larson Oil Company assigns the working interest in Lease A to Bruce Oil Company…
Hoolia Corporation acquires equipment and patents from another company for $50 million and records the acquisition as an asset acquisition. The equipment has a fair value of $19.20 million and the patents have a fair value of $28.80 million. Neither asset is nonqualifying. At what value does Hoolia record the equipment? Select one: a. $25.0 million b. $20.0 million c. $21.2 million d. $19.2 million
Baillie Power leased high-tech electronic equipment from Courtney Leasing on January 1, 2024. Courtney purchased the equipment from Doane Machines at a cost of $251,000, its fair value. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Related Information: Lease term 2 years (8 quarterly periods) Quarterly lease payments $16,000 on January 1, 2024, and on March 31, June 30, September 30, and December 31 thereafter Economic life of asset 5 years Interest rate charged by the lessor 4% Required: Prepare a lease amortization schedule and appropriate entries for Baillie Power from the beginning of the lease through December 31, 2024. December 31 is the fiscal year end for each company. Appropriate adjusting entries are recorded at the end of each quarter.

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