Myers Company acquired a 60% interest in Gannon Corporation on December 31, 2020 for $1,775,000. During 2021, Gannon had net income of $1,000,000 and paid cash dividends of $250,000. At December 31, 2021, the balance in the investment account should be O $1,775,000. O $2,375,000. O $2,225,000. O $2,525,000.
Q: Significant Influence Investment - Prepare all calculations. On January 1, 2020, Joy Inc. paid…
A: Equity method is an accounting technique of recording the financial transactions related to…
Q: Denise Adams Company Limited (DACL) complete the fiscal period of 2019 with revenue of $10M with a…
A: Return on equity is a ratio which is used by companies to measure financial performance. In other…
Q: On January 1, 2021, ABC purchased 90% of the outstanding shares of JKL Company at a cost of…
A: The consolidated income is determined by combining the incomes of both parent and subsidiary’s…
Q: Pacquired an 80% of S Company at a cost of $200,000 on January 1, 2020. S reported net income in…
A: P's share in net income of S ( For year 2021 ) = $40,000 x 80% = $32,000
Q: Dhapa
A: The objective of the question is to prepare an amortization schedule for the Space Explore bond for…
Q: 80% investment in Sarah Company. The acquisition cost was equal to Piolo equity in Sarah net assets…
A: The question is related to Consolidation. The details are as under Share of Piolo Company in Sarah…
Q: Sunland Company acquired a 50% interest in Oriole Corporation on December 31, 2020 for $1835000.…
A: Share in Net income = Net income x interest % = $1060000 x 50% = $530,000 Share in dividend =…
Q: Dolphin Company purchased 10,000 Shark Company bonds in 2018 for $57 per bond and classified the…
A: Gain on sale = Sale price - Cost of purchase
Q: On January 1, 2021, PUP CAF acquired a 10% interest in an investee for P3,000,000. The investment…
A: Working note : 1 Computation of Net Investment Income $ Share in net income (8000,000 x…
Q: Ziek Corp. acquired a 30% interest in ZKI Corporation on December 31, 2020 for $2,159,000. During…
A: Investment refers to the assets which are acquired or invested in building the wealth and also save…
Q: Live Large Inc. had the following transactions involving non-strategic investments during 2020.…
A: Journal Entry The purpose of preparing the journal entry to enter the required transaction into…
Q: Live Large Inc. had the following transactions involving non-strategic investments during 2023. 2023…
A: Part 2: Explanation:Step 1: Calculate the Cash Interest Received:- The bond pays interest…
Q: 25) ABC Corporation purchased 30,000 shares of common stock of the XYZ, Inc. for $50 per share on…
A: Percentage of holding = 30,000 / 100,000 * 100 Percentage of holding = 30%
Q: Jackson Inc. purchased 30,000 shares of common stock of the Pixel Corporation $10 per share on…
A: calculation of revenue from investment and investment shown in balance sheet are as follows
Q: On January 2, 2019, SurfCity Co. purchased 15,000 shares of Topsail, Inc. for $20 per share. The…
A: Unrealized gain or loss represents the change in the market value of the investment. For equity…
Q: Sunland Company owns 29000 of the 50000 outstanding shares of Taylor, Inc. common stock. During…
A: Investment revenue is based on the percentage of ownership and the total revenue of the company.…
Q: On January 1, 2020, PQR Company purchased 40,000 shares of Frank, Inc. at P100 per share. The…
A: Initial measurement of investment: Initially, the value of an investment property is determined by…
Q: For items 5 and 6, please refer to the following information: On January 1, 2021, ABC Company…
A: When the investment is purchased , transaction cost is included in its total cost.
Q: Manji
A: The objective of the question is to prepare an amortization schedule for the Space Explore bond for…
Q: Ed Company acquired the assets and assumed the liabilities of Sheeran Inc. on June 30, 2022. The…
A: A business combination is a transaction whereby one company buys the ownership of another (the…
Q: Gangnamn Inc owns 50% of Ps
A: An income statement is one of the financial statements which have to be prepared by the company at…
Q: Harrison Co. purchases 5,000 of the 50,000 outstanding ordinary shares of Taylor, Inc for £500,000…
A: Formula: Investment balance at year end = Beginning investment balance + net income - Dividends paid
Q: Live Large Inc. had the following transactions involving non-strategic investments during 2023. 2023…
A: The objective of the question is to prepare an amortization schedule for the Space Explore bond for…
Q: How much is the unrealized gain on equity investment reported in the 2022 other comprehensive…
A: An unrealized gain is a rise in the price of an investment that the investor has not sold. A drop in…
Q: On January 1, 2021, ABC purchased 90% of the outstanding shares of JKL Company at a cost of…
A: On January 1, 2021, ABC purchased 90% of the outstanding shares of JKL Company at a cost of…
Q: The following transactions pertain to PARANGAWAMONA Corporation: • Purchased 15,000 shares of the…
A:
Q: U
A: The objective of the question is to prepare an amortization schedule for the Space Explore bond for…
Q: On January 1, 2020, Sheffield Corporation purchased 37% of the common stock outstanding of Pharoah…
A: Sheffield Corporation purchased 37% of the Pharoah Corporation. So 37% of the net income of Pharoah…
Q: or numbers 1 to 11, identify how much to add or deduct from the Investment in Associate account of…
A: Step 1 As per US GAAP, in consolidated financial statements, we applied equity method to account the…
Q: Choose the correct answer: Westlife Company acquired on July 1, 2020, 30,000 ordinary shares of…
A: Dividend income is paid by company to its shareholders. Dividend income is considered income for the…
Q: please step by step solution.
A: On January 1, 2020, Coronado Corporation purchased 34% of the common stock outstanding of Sandhill…
Q: Use the info below to answer the following questions: On January 2, 2021, Pirate, Inc. purchased a…
A: The equity method is an accounting technique used to account for investments in which an investor…
Q: Zebest Company acquired a 25% interest in Tyco Company on December 31, 2024 for $1,500,000 and…
A: Investment in Associates and Joint venture and SubsidiaryEquity Accounting method - This method is…
Q: 2. Using the equity method, what is the investment income and the balance sheet investment account…
A: Assets are the resources or rights held by the business. These can be current assets or non-current…
Q: H Company acquires 100% of the voting stock of R Company on January 1, 2021 for P400,000 cash. A…
A: Under the acquisition method, contingent consideration obligations are recognized as part of the…
Q: On May 1, 2020, Clarke Inc. acquired 1,250 shares of Mayson Ltd. for $75,000. This investment…
A: Acquisition refers to owning a significant part of shares in another company. It does not mean the…
Q: If Apollo Company acquired a 30% interest in Twin Company on December 31, 2021 for P202,500 and…
A: The equity account of the company consists of all the money raised from the investors of the company…
Q: S16-9 On January 6, 2023, Ling Corp. paid $5,000,000 for its 40 percent investment in True World…
A: To account for investments in other companies, there are generally two methods: the equity method…
Q: H Company acquires 100% of the voting stock of R Company on January 1, 2021 for P400,000 cash. A…
A: Given that, Cash paid by H company = P400,000 Contingent consideration = P16,500 Interest rate =…
Q: In 2021, Cromwell Corporation purchased bonds of Oliver Company at par for $300,000 and classified…
A: Investments are those assets which generate income mostly in form of interest. Investments can be…
Q: Gaw Company owns 15% of the common stock of Trace Corporation and used the fair-value method to…
A: Under fair value method of recording investment, net income includes only dividend amount received.…
Q: On August 1, 2020, Andrew Inc. acquired 2,500 shares of Carrot Ltd. for $125,000. This investment…
A: Shares -A share is a piece of the ownership of a particular company. Being a shareholder in a…
Q: ALOY Company acquires 100% of the voting stock of BENNET Company on January 1, 2021 for P400,000…
A: The acquirer shall recognize contingent consideration as a part of consideration transferred to…
Q: Live Large Inc. had the following transactions involving non-strategic investments during 2020.…
A: Investments are done by companies to earn extra income in the form of interest on the residual funds…
Step by step
Solved in 3 steps
- Pearson Corporation purchased a 20% interest in Dish Company common stock on January 1, 2019 for $300,000. This investment was accounted for using the complete equity method and the correct balance in the Investment in Dish account on December 31, 2021 was $440,000. The original excess purchase transaction included $60,000 for a patent amortized at a rate of $6,000 per year. In 2022, Dish Corporation had net income of $4,000 per month earned uniformly throughout the year and paid $20,000 of dividends in May. If Pearson sold one-half of its investment in Dish on August 1, 2022 for $500,000, how much gain was recognized on this transaction? A) $190,540B) $280,950 C) $610,000D) $438,100Ed Company acquired the assets and assumed the liabilities of Sheeran Inc. on June 30, 2022. The consideration transferred by the acquirer were as follows: Cash amounting to P2,000,000.Issued 10,000 ordinary shares at P10 par with a market price of P15.Issued 5 year interest bearing bonds payable with a face value of P3,000,000 with a nominal rate of 10% and effective interest of 12%. (use two decimal places for the present value factor) Acquisition related costs incurred were as follows: Legal fees amounting to P120,000, 70% of which is not yet paid.Share issue costs paid amounted to P15,000.Bond Issue costs paid amounting to P120,000. The Balance Sheet of the two entities before acquisition were as follows: Taylor Company Swift Inc. Total Assets 16,500,000 5,235,000 Total Liabilities 2,500,000 500,000 Ordinary Shares 5,000,000 1,250,000 Share premium 1,500,000 750,000 Retained Earnings 6/30/22 7,500,000 2,735,000 It…At December 31, 2020 year-end, Lapwing Corporation's investment in Ground Inc. was $200,000 consisting of 80% of Ground's $250,000 stockholders' equity on that date. On April 1, 2021, Lapwing sold 20% interest (one-fourth of its holdings) in Ground for $65,000. During 2021, Ground had net income of $75,000 (earned uniformly) and on July 1, 2021, Ground paid dividends of $40,000. Lapwing uses the equity method to account for the investment. Required: 1. What is the gain or loss on sale of the 20% interest? 2. Record the journal entries for Lapwing for the year ending December 31.
- 39. What is the carrying amount of the investment in associates at December 31, 2021? A. P2,473,500 B. P2,691,000 C. P2,653,500 D. P2,430,000On January 1, 2020, Churl Company paid $1,700,000 for a 40% stake in Flip Company. The Flip Company's stockholders equity on January 1 and December 31, 2020 is shown below: Share capital Revaluation surplus Retained earnings January 1 3,000,000 1,000,000 December 31 3,000,000 1,300,000 1,500,000 By Jan 1, 2020, all of Flip's identified assets and liabilities were recognized at fair value. During the current fiscal year, the flip firm recorded a profit before income tax of 1,000,000 and paid dividends to stockholders of 150,000. The revaluation excess is the outcome of Flip Company's land reassessment on December 31, 2020. Flip displays OCI net of any relevant income tax. Furthermore, Flip Company provides depreciation using the declining balance approach, whereas Churl Company employs a straight line. The cumulative depreciation would have been enhanced by 200,000 if Flip Company had used the straight line. The tax rate is set at 35%. On December 31, 2020, Churl Company will report its…On 1 January 2019 Apples Ltd acquired all the assets and liabilities of Berries Ltd. Details of the consideration transferred are as follows: Cash of $200,000, half to be paid on 1 January 2019, with the balance due on 1 January 2020. The incremental borrowing rate for Apples Ltd is 10%. 100,000 shares in Apples Ltd were issued. The share price on 1 January 2019 was $5.00 per share. This price represented a six-month high. Costs of issuing the shares was $1,000. Supply of a motor vehicle to Berries Ltd. The fair value of the motor vehicle is $60,000. The motor vehicle had an original cost of $90,000, and had accumulated depreciation of $40,000 as at 1 January 2019 in Apples Ltd accounting records. Legal fees and associated with the acquisition totalled $5,000. Required: Calculate the consideration transferred.
- H Company acquires 100% of the voting stock of R Company on January 1, 2021 for P400,000 cash. A contingent payment of P16,500 will be paid on April 15, 2022 if Ron Company generates cash flows from operations of P27,000 or more next year. H Company estimates that there is a 20% probability that R Company will generate at least P27,000 next year and uses an interest rate of 5% to incorporate the time value of money. The fair value of P16,500 at 5%, using a probability weighted approach is P3,142. What will H Company record as the acquisition price on January 1, 2021? *in good accounting form pls thanksHarrison Co. owns 20,000 of the 50,000 outstanding ordinary shares of Taylor, Inc. During 2021, Taylor earns P800,000 and pays cash dividends of P640,000. If the beginning balance in the investment account was P500,000, the balance at December 31, 2021 should be a. P500,000 b.) P564,000 c.) P660,000 d.) P820,000Juniper Inc. acquired a 25% interest in Saturn Co. on January 1, 2021, for $260,000. During 2021, Saturn reported net income of $86,000, and paid a total cash dividend to shareholders in the amount of $16,000. Juniper uses the equity method to account for this investment. At the end of 2021, Juniper will report the following debit balance in the investment account: Question 6 options: $285,500 $260,000 $277,500 $281,500
- At the beginning of 2021, Nobela Corporation bought 15% ownership stake in Joseph Corporation for P200,000 and classified it as FVPL investment. Joseph's net income for the years ended December 31, 2021, and 2022, were P500,000 and P1,000,000, respectively. At the end of 2022, Joseph declared a dividend of P300,000. No dividends were declared in 2021. On December 31, 2022, the fair value of the stock owned by Nobela had increased to P500,000. How much is the total income from this investment that will be reflected in the 2022 income statement?Live Large Inc. had the following transactions involving non-strategic investments during 2023. 2023 Apr. 1 Paid $100,050 to buy a 90-day term deposit, $100,000 principal amount, 5.0 %, dated April 1. There was a $50 transaction fee included in the above-noted payment amount. June 12 Purchased 3,000 common shares of Blue Balloon Ltd. at $22.25. There was a $50 transaction fee included in the above-noted payment amount. 9 Purchased 1,800 common shares of Purple Car Corp. at $49.50. There was a $50 transaction fee included in the above-noted payment amount. 20 Purchased 700 common shares of Yellow Tech Ltd. at $15.75. There was a $50 transaction fee included in the above-noted payment amount. July 1 Purchased for $67,412 a 7.0%, $65,000 Space Explore Inc. bond that matures in eight years when the market interest rate was 6.4%. There was a $50 transaction fee included in the above-noted payment amount. Interest is paid semiannually beginning December 31, 2023. Live Large Inc. plans to…Live Large Inc. had the following transactions involving non-strategic investments during 2020. 2020 Apr. 1 Paid $119,000 to buy a 90-day term deposit, $119,000 principal amount, 7.0%, dated April 1. 12 Purchased 4,900 common shares of Blue Balloon Ltd. at $22.50. June 9 Purchased 3,700 common shares of Purple Car Corp. at $51.50. 20 Purchased 1,650 common shares of Yellow Tech Ltd. at $16.00. July 1 Purchased for $86,894 a 9.0%, $84,000 Space Explore Inc. bond that matures in eight years when the market interest rate was 8.4%. Interest is paid semiannually beginning December 31, 2020. Live Large Inc. plans to hold this investment until maturity. 3 Received a cheque for the principal and accrued interest on the term deposit that matured on June 30. 15 Received a $0.95 per share cash dividend on the Blue Balloon Ltd. common shares. 28 Sold 2,450 of the Blue Balloon Ltd. common shares at $26.25. Sept. 1 Received a $3.00 per share cash…