Base Inc. (Base) and Space Ltd. (Space) formed a joint venture, Moon Ltd., on January 1, 2023. Base invested plant and equipment with a book value of $300,000 and a fair value of $900,000 for a 30% interest in the joint venture. Base's plant and equipment were estimated to provide an additional 5 years of utility to Moon. Space contributed assets with a fair value of $2,100,000 for its 70% stake in Moon. Moon reported a net income of $2,800,000 for 2023. The transactions set out above were considered to have commercial substance. Assuming the plant and equipment transferred by Base are used to generate a positive gross profit for Moon, what portion of the unrealized gain arising from the transfer of Base's assets is realized for 2023? Nil $10,800 $126,000 $36,000
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- John Inc and Victor Inc. formed a joint venture on January 1, 2020. John invested plant and equipment with a book value of $500,000 and a fair value of $800,000 for a 30% interest in the venture which was to be called Jinxtor Ltd. Victor contributed assets with a fair value of $2,000,000 (including $200,000 in cash) for its 70% stake in Jinxtor. Jinxtor reported a net income of $3,000,000 for 2020. John's plant and equipment were estimated to provide an additional 5 years of utility to Jinxtor. The transactions set out above were considered to have commercial substance. Assuming the plant and equipment transferred by John are used to generate a positive gross profit for Jinxtor, what is the amount of the amortization of the unrealized gain for 2020 arising from the transfer of John's assets? Nil $18,000 $42,000 $60,000On January 1, 2022, Entity A, a small-medium enterprise, invested P400,000 for a 30% interest in a joint venture. Assume the INDEPENDENT CASES: For the year ended December 31, 2022, the joint venture reported a net income of P300,000 and declared dividends of P90,000. The fair value of the investment was P550,000, and the cost to sell was P50,000. There was a public price quotation for the joint venture. Entity A opted to use the cost model, what is the amount to be reported in profit or loss for the year ended December 31, 2022? Entity A opted to use the cost model, what is the balance of the Investment in Joint Venture account to be reported at December 31, 2022?Please do not provide answer in an image formate thank you. AAA and BBB formed a joint venture called CCC on January 1, 2022. Presented below are some relevant details on the establishment of this Joint Venture: All transactions were considered to be of commercial substance. The fiscal year end for all three entities (AAA, BBB, CCC) is December 31. AAA contributed plant and equipment with a fair value of $600,000. AAA's share in the venture was 30%; BBB's share is 70%. BBB contributed assets with a book value of $1,100,000 All assets transferred had a remaining useful life of 17 years. At the end of 2022, AAA realized a gain of $8,465 for its share of contributed plant and equipment. Required: Calculate the book value of plant and equipment contributed by AAA.
- On January 1, 2020, A, B and C establish a joint undertaking to manufacture a product they agree to share equally. Each will contribute P300,000 into the operation, A and B are to contribute cash while C is to contribute equipment with a carrying amount of P280,000 and fair value of P300,000. The equipment has a remaining useful life of 8 years when contributed. Questions: 1. At what amount will each operator present the Equipment on its January 1, 2020 Statement of Financial Position? 2. Using the data above, at what amount will each operator present the Equipment on its December 31, 2020 Statement of Financial Position?On January 1, 2022, Entity A, a small-medium enterprise, invested P400,000 for a 30% interest in a joint venture. Assume the INDEPENDENT CASES: For the year ended December 31, 2022, the joint venture reported a net loss of P100,000. The fair value of the investment was P390,000 and the cost to sell was P25,000. There was a public price quotation for the joint venture. Entity A opted to use the equity model. What is the balance of the Investment in Joint Venture account to be reported at December 31, 2022?In January 2022, Utah Corporation entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P2,000,000, was paid for as follows: Down payment 300,0005,000 ordinary shares of Utah with an agreed-upon value of P370 per share 1,850,0002,150,000Prior to the machine’s use, installation costs of P70,000 were incurred. The machine has an estimated useful life of 10 years and an estimated salvage value of P100,000. The straight line method of depreciation is used. The depreciation to be recognized in 2022 is
- On January 1, Year 8, Shuswap Inc. and Kalamalka Inc. formed a new joint venture, Okanagan Inc. Shuswap contributed equipment with a book value of $900,000 and a fair value of $2,100,000 for a 50% interest in the joint venture. On December 31, Year 8, Okanagan Inc. reported a net income of $612,000. The equipment transferred has an estimated useful life of 20 years. Ignore taxes. Assume the transaction does not have commercial substance because the equipment will be used for the same purpose by Okanagan. Calculate the gain on the contribution of equipment and prepare the journal entries for Shuswap Inc. to record the events on January 1 and December 31, Year 8, including Shuswap's share of profit.On January 1, Year 8, Shuswap Inc. and Kalamalka Inc. formed a new joint venture, Okanagan Inc. Shuswap contributed equipment with a book value of $900,000 and a fair value of $2,100,000 for a 50% interest in the joint venture. On December 31, Year 8, Okanagan Inc. reported a net income of $612,000. The equipment transferred has an estimated useful life of 20 years. Ignore taxes. Assume the transaction does not have commercial substance because Shuswap Ltd. owned a similar portion of the same type of equipment both before and after the contribution to the joint venture. Calculate the gain on the contribution of equipment and prepare the journal entries for Shuswap Inc. to record the events on January 1 and December 31, Year 8, including Shuswap's share of profit.4. On January 1, 2015, PHANTOM LANCER INC., RIKI CORP and NAGA SIREN CORP. establish a joint undertaking to manufacture a product they agree to share equally. Each will contribute P200,000 into the operation; PHANTOM LANCER and RIKI are to contribute cash while NAGA SIREN is to contribute equipment with a cost of P185,000. The equipment has a remaining life of 10 years when contributed.
- C. 4. On January 1, 2015, PHANTOM LANCER INC., RIKI CORP and NAGA SIREN CORP. establish a joint undertaking to manufacture a product they agree to share equally. Each will contribute P200,000 into the operation; PHANTOM LANCER and RIKI are to contribute cash while NAGA SIREN is to contribute equipment with a cost of P185,000. The equipment has a remaining life of 10 years when contributed. a. Determine the amount of NAGA SIREN will show the Equipment in JO account in its balance sheet at January 1, 2015. A. B. P61,667 P50,000 A. B. b. Determine the amount of NAGA SIREN will show the Equipment in JO account in its balance sheet at December 31, 2015. C. P66,667 D. P65,000 P45,000 P55,000 C. P60,000 D. P58,800 Determine the net amount PHANTOM LANCER or RIKI CORP. will show the Equipment in JO account in its balance sheet at December 31, 2015. A. P45,000 B. P55,500 C. D. P60,000 P58,500On January 1, 2021, Super Balut Co. establishes a branch for an initial cash investment of P10,000,000. The subsequent transactions are as follows: a. On January 3, 2021, the home office acquires land and building to be used by the branch for a total cost of P30,000,000. The branch records the assets in its books. The fair value of the land is P11,000,000, while the fair value of the building is P22,000,000. The building has an estimated useful life of 20 years and no residual value. The company uses the straight-line method of depreciation. b. On February 14, 2021, the home office transfers inventory worth P20,000,000 to the branch. The home office pays freight of P500,000. c. On March 1, 2021, the home office transfers additional inventory worth P5,000,000 to the branch. This time the branch pays the freight of P100,000. d. On March 31, 2021, the branch acquires equipment for P900,000 cash. The equipment will be carried in the home office’s books. The equipment has a useful life of…A Co. and Z Inc. formed AZ Company on January 1, 2021. A Co. invested machinery with a carrying amount of $50,000 and a fair value of $75,000 for a 60% interest in AZ Company. A Co. receives a $15,000 cash in return for investing the machinery in AZ Company. While Z Inc. contributed another machinery, which was similar to the equipment contributed by A Co., with a total fair value of $90,000, and $17,000 cash for a 40% interest in ST Company. The machinery has an estimated useful life of 5 years. On December 31, 2021. AZ Company reported a net income of $40,000. Assume that the transaction does have commercial substance. What is the balance of the Investment in Joint Venture in the financial position of S Co. as of December 31, 2021. a. $68.213 b. $84,000 c. $68,000 d. $83.000