Leslie's Company bought 20% of Prudence Company's ordinary share on January 1, 2020 for P3,700,000. The carrying amount of Prudence's net assets at purchase date totaled P16,000,000. Fair values and carrying amounts were the same for all items, except for land and inventory, for which fair values exceed their carrying amounts by P3,000,000 and P1,000,000 respectively. All inventories at January 1, 2020 were sold during the year. During 2020, Prudence reported profit of P5,500,000 and paid P1,500,000 cash dividends. What amount should Leslie's Company report as investment in associate on December 31, 2020?
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- Leslie's Company bought 20% of Prudence Company's ordinary share on January 1, 2020 for P3,700,000. The carrying amount of Prudence's net assets at purchase date totaled P16,000,000. Fair values and carrying amounts were the same for all items, except for land and inventory, for which fair values exceed their carrying amounts by P3,000,000 and P1,000,000 respectively. All inventories at January 1, 2020 were sold during the year. During 2020, Prudence reported profit of P5,500,000 and paid P1,500,000 cash dividends. What amount should Leslie's Company report as income from investment in its 2020 profit or loss section of the statement of comprehensive income?Ab Company bought 20% of CD Company' ordinary share on January 1, 2021 for P3,700,000. The carrying amount of CD's net assets at purchase date totaled P16,000,000. Fair values and carrying amount were the same for all items, except for inventory for which fair values exceed their carrying amount by P1,500,000. All inventories at January 1, 2021 were sold during the year. During 2021, CD reported profit of P7,500,000 and paid P1,500,000 cash dividends. What amount should AB Company report as income from investment in its 2021 profit or loss section of the statement of comprehensive income?On January 1, 2022, P Company acquired 80% of S Company forP2,000,000. The fair value of identifiable net assets is P1,800,000. NCI ismeasured at fair value. During 2022, P Company ships merchandise to SCompany costing P1,000, 000 at 20% above cost. Additional data are asfollows:P Company S CompanySales 5,500,000 2,500,000Cost of Sales 3,200,000 1,600,000Operating Expense 650,000 300,000The ending inventories of S Company includes merchandise from PCompany amounting to P60,000. Impairment of goodwill is P20,000.How much is the consolidated gross profit?
- On January 1, 2020, Merlo Company acquired 80% of the stocks of Fritzie Company for P2,000,000. On this date, Fritzie Company had P1,000,000 of Capital Stock and P800,000 of Retained Earnings. On this date, the carrying values of the identifiable assets and liabilities of Fritzie Company are equal to their fair values.During the year, Merlo Company ships merchandise to Fritzie Company merchandise amounting to P800,000, which includes 25% gross profit rate. At the end of the year, records show the following: Merlo Company Fritzie CompanyInventories, Jan 1. P350,000 P120,000Inventories, Dec. 31 400,000 200,000Sales 5,500,000 2,500,000Cost of Sales 3,200,000 1,600,000Operating expenses 650,000 300,000Dividends paid 500,000 350,000The ending…Acker Inc. bought 40% of Howell Co. on January 1, 2020 for $576,000. The equity method of accounting was used. The book value and fair value of the net assets of Howell on that date were $1,440,000. Acker began supplying inventory to Howell as follows: YEAR/ COST TO ACKER/ TRANSFER PRICE/ AMOUNT HELD BY HOWELL AT YEAR-END: 2020/ $55,000/ $75,000/ $15,000 2021/ $70,000/ $110,000/ $55,000 Howell reported net income of $100,000 in 2020 and $120,000 in 2021 while paying $40,000 in dividends each year. what is the equity in Howell income that should be reported by Acker in 2021? options are $32,000 - $41,600 - $48,000 - $49,600 - $50,600On July 1, 2020, Blue George Company purchased 25% interest of Pink Conrad for P150,000. Blue George incurred transaction cost equal to 5% on the transaction price. On October 1, 2020, Pink Conrad declared dividends of P80,000. At the end of 2020, Pink Conrad reported net income of P200,000. On January 1, 2021, the fair values of Pink Conrad's net assets were as follows:Current Assets - P100,000;Equipment - P150,000;Patent – P120,000;Land - P50,000;Buildings - P300,000; andLiabilities - P80,000. On January 1, 2021, Blue George Company purchased 50% interest of the Pink Conrad Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. Pink Conrad paid for the legal fees of P10,000 and securities SEC registration of P20,000 which was reimbursed by Blue George. The Patent of Pink Conrad refers to the technology purchased by Pink Conrad from Blue George years ago. Blue George had an outstanding unearned revenue related to the Patent amounting to…
- On July 1, 2020, Blue George Company purchased 25% interest of Pink Conrad for P150,000. Blue George incurred transaction cost equal to 5% on the transaction price. On October 1, 2020, Pink Conrad declared dividends of P80,000. At the end of 2020, Pink Conrad reported net income of P200,000. On January 1, 2021, the fair values of Pink Conrad's net assets were as follows:Current Assets - P100,000;Equipment - P150,000;Patent – P120,000;Land - P50,000;Buildings - P300,000; andLiabilities - P80,000. On January 1, 2021, Blue George Company purchased 50% interest of the Pink Conrad Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. Pink Conrad paid for the legal fees of P10,000 and securities SEC registration of P20,000 which was reimbursed by Blue George. The Patent of Pink Conrad refers to the technology purchased by Pink Conrad from Blue George years ago. Blue George had an outstanding unearned revenue related to the Patent amounting to…Several years ago, Quarantine Company purchased 80% interest of Lockdown Company for an amount equal to the fair value of Lockdown’s net assets. On March 9, 2022, Quarantine sold inventory to Lockdown for P150,000 of which P50,000 was unsold as of December 31, 2022. The beginning inventory of Lockdown includes P30,000 worth of merchandise purchased from Quarantine. For the year ended December 31, 2022, Quarantine reported profit of P200,000 and paid dividends of P60,000. Lockdown has a net income and dividends paid of P90,000, and P45,000, respectively for 2022. Quarantine sells merchandise at a profit rate of 25% based on cost, while Lockdown has a profit rate of 30% based on cost. Compute the consolidated net income.On January 1, 2018, ICT Company purchased 80% of ESP Company's stock for P975,000. On this date, the carrying amount of ESP Company's net assets were P1,000,000. The fair value of ESP Company's identifiable assets and liabilities were the same as their carrying amount except for plant assets (net) which were P100,000 in excess of the carrying amount. For the year ended, ESP Company had a net income of P190,000 and paid cash dividends totaling P125,000. Parent opted to measure NCI proportionate to its share on ESP's identifiable net assets. In the December 31, 2018 consolidated balance sheet, NCI should be reported at:
- Lance Company purchased 35% interest in Mila Company for P5,600,000 on July 15, 2020. SG already held a 25% interest purchased for P3,000,000. As of this date, the carrying value of the identifiable net assets of Mila totaled P17,000,000. The carrying value of the identifiable net assets of Mila equal their fair values except for the undervaluation of Inventories and Machineries by P400,000 and P1,000,000 respectively. Business combination is between SMEs. How much is the goodwill/(gain on bargain purchase) arising from the combination?Parent Company purchased 35% interest in Sub Company for P5,600,000 on July 15, 2020. Parent already held a 25% interest purchased for P3,000,000. As of this date, the carrying value of the identifiable net assets of Sub totaled P17,000,000. The carrying value of the identifiable net assets of Sub equal their fair values except for the undervaluation of Inventories and Machineries by P200,000 and P1,000,000 respectively. The fair value of the noncontrolling interest on July 15, 2020 is P7,000,000. How much is the gain on bargain purchase to be recognized as a result of the business combination? 1,600,000 2,320,000 1,320,000 2,600,000Parent Company purchased 35% interest in Sub Company for P5,600,000 on July 15, 2020. Parent already held a 25% interest purchased for P3,000,000. As of this date, the carrying value of the identifiable net assets of Sub totaled P17,000,000. The carrying value of the identifiable net assets of Sub equal their fair values except for the undervaluation of Inventories and Machineries by P200,000 and P1,000,000 respectively. The fair value of the noncontrolling interest on July 15, 2020 is P7,000,000. How much is the gain on bargain purchase to be recognized as a result of the business combination? how much is the previously held interest at the date of acquisition?