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- 5. In 2020, the entity purchased the following equity securities for the purpose of selling them in the near term. 12/31/2021 P1,920,000 Fair Values 6/30/2022 P1,800,000 Cost P2,000,000 On June 30, 2022, the entity transferred its investment to financial assets at FVTOCI because of a rare circumstance (arising from a single event that is unusual and highly unlikely to recur in the near term). 12/31/2022 P1,720,000 What amount should the entity report as unrealized loss in its 2022 profit or loss? a. P200,000 b.P120,000 c. P80,000 d.POElimination of intercompany profits for variable interest entities (VIES) and voting interest entities Assume that on January 1, 2019, a Reporting Company acquires a 35 percent interest in a Legal Entity for $392,000 cash. The fair value of the 65 percent interest not acquired by the Reporting Company is $728,000. The fair value and book value of the identifiable net assets of the Legal entity equals $1,120,000. The Reporting Company has a right to 35 percent of the reported income (loss) of the Legal Entity. The Legal Entity is determined to be a VIE, and the Reporting Company is determined to be primary beneficiary. For the year ended December 31, 2019, the Reporting Company and the VIE reported the following pre-consolidation income statements assuming that the Reporting Company applies the equity method: Sales Costs of goods sold Gross profit Operating expenses Equity method income (loss) from VIE Net income Reporting Company VIE $1,232,000 $336,000 (739,200) (224,000) 492,800…12. On January 1.2020. Animosity Compony purchased 50000 shares of another enfify for P3,800,000. On October 1,2020, frie enfify ieceived 50,000 stock rghts Trom the investee. Each right entities the holder to acquire one share for P80. he market price of investee's stiares wos Pi00 mmediafely before fhe rights were- 15Sued and P90 immediotely ofter the rights were issued. On December 1.2020. ihe entity exercised aff stock rights. On Decembe 31,2020, the antity sold 25,000 shares at P90per share. The stock rights are not accounted for separately. If the FIFO approach is used.whatis the gain on sale of investment that should be recognized in 20207 a. 350.000 b. 300,000
- if the retained earning is 350,000 December 31, 2021 WHAT IS THE NON-CONTROLLING INTEREST TO BE REPORTED IN THE CONSOLIDATED FINANCIAL STATEMENT ON DEMEBER 31,2021 no changes were made in the oridnary shares of the subsidiaryOn January 1, 2021, PORKING acquired majority of SAPER’s outstanding voting stocks. On that day, the (incomplete) working paper entries on that day were as follow WPE#1 Dr: Ordinary shares of SAPER 300,000 Dr: APIC of SAPER 300,000 Dr: RE of SAPER 375,000 Cr: Investment in SAPER ? Cr: Non-controlling interest ? WPE#2 Dr: Assets of SAPER 174,500 Cr: Investment in SAPER 113,425 Cr: Non-controlling interest ? WPE#3 Dr: Goodwill ? Cr: Investment in SAPER 74,075 Cr: Non-controlling interest ? Group of answer choices a.None of the choices b.50% c.100% d.75%Loreal-American Corporation purchased several marketable securities during 2021. At December 31, 2021, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2020, and all are considered securities available-for-sale. Unrealized Holding Gain (Loss) Cost Fair Value Short term: Blair, Inc. ANC Corporation $ 484,000 452,000 $ 403,000 484,000 $(81,000) 32,000 Totals $ 936,000 $ 887,000 $(49,000) Long term: Drake Corporation $ 484,000 718,000 $ 562,000 $ 78,000 (56,000) $ 22,000 Aaron Industries 662,000 Totals $1,202,000 $1,224,000 Required: 1. Prepare appropriate adjusting entries at December 31, 2021. 2. What amount would be reported in the income statement at December 31, 2021, as a result of the adjusting entry? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What amount would be reported in the income statement at December 31, 2021, as a result of…
- Assuming the retained earnings of Subsidiary on December 31, 2021 is P350,000, determine the non-controlling interest to be reported in the consolidated financial statements on December 31, 2021 assuming no changes to Subsidiary company's ordinary shares.D 54 On January 1, 2019, an entity acquired a 10% interest in an investee for 3,000,000. The investment was accounted for under the cost method. During 2019, the investee reported net income of 4,000,000 and paid dividend of 1,000,000. On January 1, 2020 the entity acquired aa further 15% interest in the investee for 8,500,000. On such date, the carrying amount of the net assets of the investee was 36,000,000 and the fair value of the 10% existing interest was 3,500,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value was 4,000,000 greater than the carrying amount. The equipment had a remaining life of 5 years. The investee reported net income of 8,000,000 for 2020 and paid dividend of 6,000,000 om December 31, 2020. What amount of investment income should be recognized in 2019? * Enter your answer2. What amount should be recognized as gain on sale of Problem 16-11 (IAA) On July 1, 2021, Queen Company purchased for P2,400,000, 50,000 newly issued 6% cumulative P20 par value preference shares. Each preference share had one share warrant attached which entitled the holder to acquire at P15 one ordinary share of P10 par value for each two warrants held. The market price on this date of the preference share without warrant was P50 and the market price of the share warrant was P10. On December 1, 2021, all the share warrants wre sold for P700,000. 1. What amount should be recorded as cost of the investment in preference shares? a. 2,400,000 b. 2,000,000 c. 1,200,000 d. 1,000,000 warrants? a. 300,000 b. 700,000 c. 400,000 d.
- Gera Corporation owns two financial investments in the shares of listed companies. Details of which are as follows: Investment 1 – Acquired on September 1, 2020, at a cost of P50,000 with a Fair value of P60,000 at year-end for the purpose of trading. Investment 2 - Acquired on August 1, 2020, at a cost of P25,000 to hold indefinitely. Its fair value at year-end is P20,000. What are the amounts to appear in the Statement of Comprehensive Income for the year ended September 30, 2020?Problem 15-11 (AICPA Adapted) During 2021, Latvia Company purchased trading securities with the following cost and market value on December 31, 2021: Security Cost Market value A 1,000 shares B - 10,000 shares C- 20,000 shares 200,000 1,700,000 3,100,000 300,000 1,600,000 2,900,000 5,000,000 4,800,000 The entity sold 10,000 shares of Security B on January 15, 2022 for P150 per share. What amount should be reported as loss on sale of trading investment in 2022? a. 200,000 gain b. 200,000 Ioss c. 100,000 gain d, 100,000 loss5. The statement of financial position of Super LLC and Star LLC at 31st Dec 2019 are as follows, Additional Information,1. Super LLC acquired 80% of shares on 31st Dec 2016 for OMR 20,0002. On 31st Dec 2016, the retained earnings of Star LLC was OMR 3,000.3. On 31st Dec 2016, fair value of Star company's non-current assets was OMR 2,000 more than theirbook value.4. This revaluation has not been reflected in the books of Star LLC.5. Star LLC has issued no shares since being acquired by Super LLC.6. Goodwill arising on consolidation has suffered an impairment loss of 30% since acquisition.7. (Prepare a consolidated/ Group statement of financial position as at 31 March 2019.)
