January 1, 20x1, Entity A, a public entity, and Entity B, a public entity, incorporated C, which has its fiscal and operational autonomy. The contractual agreement of the incorporating entities provided that the decisions on relevant activities of Entity C will require the unanimous consent of both entities. Entity A and Entity B will have the rights to the net assets of Entity C. Entity A and Entity B invested P2,000,000 and P3,000,000 respectively, equivalent to 40:60 capital interest of Entity C. the financial statement of Entity C provided the following data for its two-year operation: 20x1 20x2 Net income (loss) 450,000 (P4,500,000) Dividends declared 225,000 REQUIRED: Compute the balance of investment in Entity C to be reported by: 9. Entity A on December 31, 20x2 10. Entity B on December 31, 20x2

January 1, 20x1, Entity A, a public entity, and Entity B, a public entity, incorporated C, which has its fiscal and operational autonomy. The contractual agreement of the incorporating entities provided that the decisions on relevant activities of Entity C will require the unanimous consent of both entities. Entity A and Entity B will have the rights to the net assets of Entity C. Entity A and Entity B invested P2,000,000 and P3,000,000 respectively, equivalent to 40:60 capital interest of Entity C. the financial statement of Entity C provided the following data for its two-year operation: 20x1 20x2 Net income (loss) 450,000 (P4,500,000) Dividends declared 225,000 REQUIRED: Compute the balance of investment in Entity C to be reported by: 9. Entity A on December 31, 20x2 10. Entity B on December 31, 20x2

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter13: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 48P

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On January 1, 20X1, Entity A and Entity B, both public entities, incorporated Entity C by investing P3,000,000 and P2,000,000 for a capital interest ratio of 60:40. The contractual agreement of the incorporating entities provided that the decisions on relevant activities of Entity C will require unanimous consent of both Moreover, Entity A and Entity B will have rights to the net assets of Entity C. The financial statements of Entity C provided the following data for 20X1: Entity C reported a net income of P1,000,000 for 20X1 and paid cash dividends of P400,000 on December 31, During 20X1, Entity C sold inventory to Entity A with a gross profit of P50,000. 80% of those inventories were resold by Entity A to third persons during The remainder was resold to third persons during 20X1. On July 1, 20X1, Entity C sold a piece of machinery to Entity B at a loss of P20,000. At the time of sale, the machinery has remaining useful life of two (2) Determine the following: The investment…
1. On January 1, 20X1, Entity A and Entity B, both public entities, incorporated Entity C by investing P3,000,000 and P2,000,000 for a capital interest ratio of 60:40. The contractual agreement of the incorporating entities provided that the decisions on relevant activities of Entity C will require unanimous consent of both entities. Moreover, Entity A and Entity B will have rights to the net assets of Entity C. The financial statements of Entity C provided the following data for 20X1: Entity C reported a net income of P1,000,000 for 20X1 and paid cash dividends of P400,000 on December 31, 20X1. During 20X1, Entity C sold inventory to Entity A with a gross profit of P50,000. 80% of those inventories were resold by Entity A to third persons during 20X1. The remainder was resold to third persons during 20X1. On July 1, 20X1, Entity C sold a piece of machinery to Entity B at a loss of P20,000. At the time of sale, the machinery has remaining useful life of two (2) years. Required:…
ABC and XYZ enter into a contract to set up a separate vehicle (entity 123) for the purpose of operating a tennis court. The contractual arrangement between the parties establishes joint control of the activities of the tennis court. Entity 123, and not ABC or XYZ, has rights to the assets and obligations to the liabilities of the arrangement. The following transactions of the joint arrangement occurred during 2022 and 2023: 2022: Received P5,000,000 each from the parties in the joint arrangement as initial investment Costs of incorporation paid amounted to P200,000 Acquired land at a cost of P2,000,000, cash Various costs to construct the tennis courts incurred and paid amounted to P6,000,000 Office equipment purchased on account, P500,000 Rental income collected from tennis players, P4 million Various operating costs paid amounted to P300,000 2023: Operating costs paid amounted to P500,000 Rental income collected from tennis players, P6 million Partial payment on the office…
In the year ended June 30 2021, Lorelai Ltd, a reporting entity, acquired the assets and assumed the liabilities of the Rory Teens operation from Gilmore Ltd for $10,000,000. At the date of acquisition, the fair values of the net separable identifiable assets and liabilities of the operation were $8,000,000 and $1,000,000 respectively. Based on this information, the transaction has resulted in: O a. The acquisition of certain assets and liabilities, which is not a business combination since Rory Teens is not managed to provide a return to investors but only to provide a return to Gilmore Ltd. O b. None of these answers is correct. O c. The acquisition of certain assets and liabilities, which is not a business combination since Rory Teens is not a business but simply part of the Gilmore Ltd business. O d. A business combination of Lorelai Ltd and Rory Teens.
In paragraph 44 of Statement of Financial Accounting Standards No. 141, “Business Combinations,” the Financial Accounting Standards Board directed that if the sum of the fair values of assets acquired and liabilities assumed in a business combination exceeds the cost of the acquired enterprise, such excess should be allocated as a pro rata reduction of amounts that otherwise would have been assigned to noncurrent assets other than specified exceptions.Instructions What support, if any, do you find for the action of the FASB? Explain.
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.
a. What amount of ordinary income and separately stated items are allocated to them for year 1 based on the information above? Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis). b. What amount of ordinary income and separately stated items are allocated to them for year 2 based on the information above? Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis).
The following assets are to be transferred under section 85 for consideration including commonshares plus boot as indicated below:FMV ACB UCC Boot receivedLand 75,000 60,000 - 70,000Equipment 50,000 65,000 40,000 45,000For each of the assets transferred, specify the elected amount and related tax consequences.
Use the following to answer questions 8 through 10: On May 1, 2021, Jazzie Co. agreed to sell the assets of its Mister Division to Shawna Inc. for $80 million. The sale was completed on December 31, 2021. Jazzie’s year ends on December 31st. The following additional facts pertain to the transaction: The Mister Division qualifies as a component of an entity as defined by GAAP. Mister's net assets totaled $48 million on Jazzie's books at the time of the sale. Mister incurred a pre-tax operating loss of $10 million in 2021. Jazzie’s income tax rate is 40%. In the 2021 income statement for Jazzie Co., they would report after tax income from discontinued operations of: Group of answer choices $9.2 million. $13.2 million. $22 million. $26 million.
. Entity X and Entity Y incorporated Entity Z to manufacture a microchip to incorporate entities as componentsfor their final products for cellular phones and tablets.The contractual agreement of the incorporating entities provided that the decisions on relevant activities ofEntity C will require the unanimous consent of both entities.Entity X and Entity Y have rights to the assets, and obligations for the liabilities, relating to the agreement.Entity X and Entity Y will own the ordinary shares of Entity Z in the ratio of 60:40.The contractual agreement of Entity X and Entity Y also provided the following about the assets andliabilities of Entity Z:• Entity X owns the land and incurs the loan payable of Entity Z.• Entity Y owns the building and incurs the note payable of Entity Z.• The other assets and liabilities are owned by Entity X and Entity Y based on their capital interest inEntity Z. • The sales revenue of Entity Z includes sales to Entity X and Entity Y in the amount of…
On 1 October 2018, Jojo Bhd with 2 other parties, Kenari Bhd and Tiong Bhd, structured a joint arrangement in an incorporated entity, Koko Bhd, with rights to the net assets of the arrangement. Jojo Bhd has 40% of the voting rights in the joint arrangement while Kenari Bhd and Tiong Bhd have 35% and 25% of the voting rights respectively. The contractual arrangement between these three parties specifies that at least 75% of the voting rights are required to make decisions about the relevant activities of the arrangement. Required:(a) Explain whether all the three parties in the joint arrangement would have joint control over Koko Bhd. (b) Briefly explain the two types of joint arrangement in accordance with MFRS11: Joint Arrangement.
AAA Co. and BBB, Inc. both engage in the same business. On January 1, 20x1, AAA and BBB signed a contract, the terms of which resulted in AAA obtaining control over BBB without any transfer of consideration between the parties.The fair value of the identifiable net assets of BBB, Inc. on January 1, 20x1 is ₱2,000,000. BBB chose to measure non-controlling interest at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.Requirement: Compute for the goodwill.