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- 5. On January 1, 2021, ABC Co. acquired all of the identifiable assets and assumed all of the liabilities of XYZ, Inc. by paying cash of ₱4,000,000. On this date, XYZ’s identifiable assets and liabilities have fair values of ₱6,400,000 and ₱3,600,000, respectively. ABC agrees to pay an additional amount equal to 10% of the 20x1 year-end profit that exceeds ₱1,600,000. XYZ historically has reported profits of ₱1,200,000 to ₱1,600,000 each year. After assessing the expected level of profits for the year based on forecasts and plans, as well as industry trends, ABC estimated that the fair value of the contingent consideration is ₱40,000. How much is the goodwill (gain on bargain purchase)?Notes to the financial statements reveal the following information: 1. Gain on sale of a portion ofthe branded product line. In Year 10, Henry completed the sale of a portion of one of itsbranded product lines for $735 million. The transaction resulted in a pretax gain of $464.5million. The sale did not qualify as a discontinued operation. Henry did not disclose the taxeffect of the gain reported in Table above.REQUIREDa. Discuss whether you would adjust for each of the following items when using earnings toforecast the future profitability of Henry :1. Gain on sale of a portion of the branded product line.2. Extraordinary loss .b. Indicate the adjustment you would make to Henry’s net income for each item in Requirement(a)2.On Feb, 1, Johnson Co. agreed to sell the assets of its Formal Wear Division to Sun Hat Inc. The following additional facts pertain to the transaction: The Formal Wear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. The book value of Formal Wear's assets totaled $48 million on December 31, 2021. Formal Wear's operating income was a pre-tax loss of $10 million in 2021. Tango's income tax rate is 25%. Suppose that the Formal Wear Division's assets had not been sold by December 31, 2021, but were considered held for sale. Assume that the fair value of these assets was $40 million at December 31, 2021. In the income statement for the year ended December 31, 2021, Tango Co. would report discontinued operations of: A) $7.5 million loss. B) $10.0 million loss. C) $18 million loss. D) $13.5 million loss. .
- Happy Mart Sdn Bhd acquired an equipment in Year 2016 for RM100,000 and depreciates it on a straight-line basis over its expected useful life of five years. The equipment has no residual value. For tax purposes, the equipment is depreciated at 25% per annum on a straight-line basis. Tax losses may be carried back against taxable profit of the previous five years. In year 2015, the entity's taxable profit was RM25,000. The tax rate is 20%. Required:- Assuming nil profits/losses after depreciation in years 2016 to 2020, show the current and deferred tax impact in years 2016 to 2020 of the acquisition of the equipment. In this question the proformas are given to you to help you to setting out your answer. Please use a separate sheet for your workings. Year Taxable income Depreciation for tax purposes Taxable profit (tax loss) Current tax expense (income) 2016 2017 2018 2019 2020 Year |Carrying amount Tax base Taxable temporary difference 2016 2017 2018 2019 2020 Opening deferred tax…Ryan Ltd holds a 75% interest in Tully Ltd. On 30 June 2021 Tully Ltd transferred a depreciable non-current asset to Ryan Ltd at a profit of $15 000. Ryan Ltd determined that the remaining useful life of the asset at the date of transfer to Ryan Ltd was 5 years and the tax rate is 30%. The impact of the above transaction on the NCI share of profit at 30 June 2021 is: a. a decrease of $2 625 b. an increase of $3 750 c. an increase of $2 100 d. a decrease of $3 225 e. None of the above Please dont provide answer in image format thannk youaste Company owns an 80% controlling interest in the Bastion Company. Bastion regularly sells merchandise to Baste, which then sold to outside parties. The gross profit on all such sales is 40%. On January 1, 2019, Baste sold land and a building to Bastion. The value of the parcel is 20% to land and 80% to structures. The data are the following:Baste BastionInternally generated net income, 2019 P1,560,000 P750,000Internally generated net income, 2020 10,320,000 705,000Intercompany merchandise sales, 2019 300,000Intercompany merchandise sales, 2020 360,000Intercompany inventory, December 31, 2019 45,000Intercompany inventory, December 31, 2020 60,000Cost of real estate sold on January 1, 2019 1,800,000Sales price of real estate on January 1, 2019 2,400,000Depreciable life of building 20 yearsFor 2019, what is the consolidated comprehensive income attributable to controlling interest?a. 1,575,000b. 1,597,500c. 1,569,600d. 1,875,000
- Happy Mart Sdn Bhd acquired an equipment in Year 2016 for RM100,000 and depreciates it on a straight-line basis over its expected useful life of five years. The equipment has no residual value. For tax purposes, the equipment is depreciated at 25% per annum on a straight-line basis. Tax losses may be carried back against taxable profit of the previous five years. In year 2015, the entity's taxable profit was RM25,000. The tax rate is 20%. Required:- Assuming nil profits/losses after depreciation in years 2016 to 2020, show the current and deferred tax impact in years 2016 to 2020 of the acquisition of the equipment. In this question the proformas are given to you to help you to setting out your answer. Please use a separate sheet for your workings. Year Taxable income Depreciation for tax purposes Taxable profit (tax loss) Current tax expense (income) 2016 2017 2018 2019 2020 Year 2016 2017 2018 2019 2020 Carrying amount Таx base Taxable temporary difference Opening defered tax…Eleven years ago, Lynn, Incorporated purchased a warehouse for $315,000. This year,the corporation sold the warehouse to Firm D for $80,000 cash and D’s assumption ofa $225,000 mortgage. Through date of sale, Lynn deducted $92,300 straight-linedepreciation on the warehouse.Required:b. What is the character of this gain?c. How would your answers change if Lynn was a noncorporate business?Luck Corporation , which was formed January 1, 2015, has a net short-term capital gain of $60,000 and a net long-term capital loss of $100,000 during 2020. Luck Corporation had taxable income from other sources of $200,000. Prior years' transactions included the following (note 2019 had no capital gains or losses):2015- net long term capital gain of 150k 2016- net short term capital gain of 24k 2017- net short term capital gain of 12k 2018- net long term capital gain of 8kLuck's carryover to 2021 is: Select one: a. $0 b. $40,000 long-term capital loss c. $20,000 long-term capital loss d. $20,000 short-term capital loss e. None of the above
- 17. Kiwi Corporation reports the following information: • Correction of overstatement of depreciation expense in prior years, net of tax- P215,000 • Dividends declared- P160,000 • Net income- P500,000 • Retained earnings, 1/1/21, as reported- P1,000,000 Kiwi should report retained earnings, December 31, 2021 at a. P1,555,000. b. P1,340,000. c. P1,125,000. d. P785,000.Berny Ltd owns 100 per cent of Cozy Ltd. On 1 July 2019 Berny Ltd sells an item of plant to Cozy Ltd for $3.6 million. This plant cost Berny $4.5 million and had accumulated depreciation of $1.8 million at the date of the sale. The remaining useful life of the plant is assessed as 12 years and the tax rate is 30 per cent. Required: a) Prepare the entries to eliminate the effects of the above intragroup transactions in the consolidation journal of Berny Ltd’s group at 30 June 2020 b) Prepare the entries to eliminate the effects of the above intragroup transactions in the consolidation journal of Berny Ltd’s group at 30 June 2021Hagrid Inc. is subject to an acquisition of control (AOC) on January 1, 2023. The company has a business loss of $65,000 in its 2022 taxation year prior to the AOC, which cannot be carried back. On December 31, 2022, the company had two capital properties, land with an ACB of $150,000 and FMV of $65,000; and a depreciable property with a capital cost and ACB of $100,000, a UCC of $75,000 and a FMV of $200,000. Assuming Hagrid will continue in business and will return to profitability in 2023, what write downs and elections are available to Hagrid Inc. in order to optimize the amount of 2022 non-capital losses carried forward to the 2023 taxation year? Hagrid Inc. should elect to recognize the allowable capital loss of $42,500 on the land at the end of 2022. A capital gain on the depreciable property would be realized equal to $50,000 and there would be recapture of $25,000. Hagrid Inc. should elect to recognize the allowable capital loss of $42,500 on the land at the end of 2022. A…
