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.
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- Harrison 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.) P820,000Q1: How much is the investment income on 2021? Q2: How much is the carrying amount of the Investment in Associate as of December 31, 2021?How much is the cost of investment? how much is the goodwill to be reported on January 31, 2022?
- 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?Please help meCPA corporation purchased a 10% interest in ABC co. on January 1, 2021 as an available for sale investment for a price of P120,000. On January 1, 2022, CPA purchase 7,000 additional shares of ABC from existing stockholders for P945,000. This purchase increased CPA's interest to 70%. ABC had the following statement of financial position just prior to the second purchase. Current Assets 495,000 Building, Net Equipment, Net 420,000 300,000 Liabilities 195,000 Common Stock, P30 par Retained Earnings 300,000 720,000 On the date of second purchase, CPA determines that the equipment was understated by 150,000 and had a remaining life of 5yrs. All other book values approximate their fair values. Any remaining excess is attributed to goodwill. On January 1, 2022 consolidated financial position, what is the amount of goodwill to be reported?
- Orange LTD has the following investments at December 31, 2020; Fair value Historical cost Sept 30, 2019 $15,000 Fair value Sept 30, 2020 $25,000 Fair value Dec 31, 2020 $30,000 Shares of DEF Bonds of Brooke purchased at par value) Shares of CooksTown Shares of Tulip $25,000 10,000 12,000 18,000 12,000 18,000 16,500 11,000 16,000 19,500 12,500 16,000 20,500 Orange, whose year-end is Sept. 30, purchased the share of Tulip on January 1, 2019, If Orange irrevocably elected to classify its investment in Tulip at fair value through OCL what amount will be reported in other comprehensive income at September 30, 2020? $1,500 gain O $2,500 gain. et O $19,500 O $3,000 gain.On January 4, 2021, Runyan Bakery paid $334 million for 10 million shares of Lavery Labeling company common stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery’s operations. Runyan received dividends of $4.00 per share on December 15, 2021, and Lavery reported net income of $200 million for the year ended December 31, 2021. The market value of Lavery’s common stock at December 31, 2021, was $31 per share. On the purchase date, the book value of Lavery’s identifiable net assets was $850 million and: a The fair value of Lavery’s depreciable assets, with an average remaining useful life of nine years, exceeded their book value by $90 million. b The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill. Required: 1.Prepare all appropriate journal entries related to the investment during 2021, assuming Runyan accounts…Trump Ltd acquired all the assets and liabilities of Bush Ltd on 30 June 2020. The purchase consideration was as follows: • $1,000,000 in cash paid on acquisition date • Two shares in Trump Ltd for every one share in Bush Ltd. Bush Ltd has 2,000,000 shares on issue at 30 June 2020. At 30 June 2013 Trump Ltd shares were quoted on the ASX at $2.50 per share. • A deferred payment of $500,000 to be paid on 30 June 2014.Trump Ltd’s cost of capital is 7% which represents a one period present value factor of 0.9346 • Should the price of Trump Ltd shares fall below $2.50 in the six months following the acquisition Trump Ltd is required to pay a cash contingent consideration. It is estimated that there is a 60% probability that the share price will fall to $2.45 in this period. Other information - Trump Ltd incurred legal and other costs associated with the acquisition of $10,000 - Trump Ltd incurred share issue costs of $4,000 The assets and liabilities acquired from Bush Ltd are as…
- Pacquired a 70% of S on January 1, 2020, for S380,000. During 2020 S had a net income of $30,000 and paid a cash dividend of $10,000. Applying the cost method would give a balance in the Investment account at the end of 2020 of: Select one: $394,000 $400,000 O $380,000 $373,000On 1 January 2019 Big Ltd acquired all the assets and liabilities of Small Ltd instead of Small Ltd's issued shares. Details of the consideration paid: Cash of $380,000, half to be paid on 1 January 2019, with the balance due on 1 January 2020. The incremental borrowing rate for Big Ltd is 10% . 100,000 shares in Big Ltd were issued. The share price on 1 January 2019 was $1.50 per share. This price was a six-month high. Cost of issuing the shares was $1,500. Owing to the doubts whether the share price would remain at $1.50, Big Ltd agreed to pay cash equal to value of any decrease in the share price below $1.50. This guarantee was valid for 3 months (to 31 March 2019). Big Ltd believed that there was a 75% chance that the share price would remain at or above $1.50 until 31 March 2019 and a 25% chance that it would fall to $1.40. Supply of a patent to Small Ltd. The fair value of the patent is $60,000. As the patent was internally generated by Big Ltd, it has not been recognised in Big…Jen COMPANY completed the following transactions in relation to its long-term investments in Jisoo Company. On January 1, 2019, Jen Company purchased 20,000 shares of Jisoo Company, P100 par, at P110 per share. This was debited to the investment account. On March 1, 2019, Jisoo Company issued rights to Jen Company, each permitting the purchase of 1/4 share at par. No entry was made. The bid price of the share was 140 and there was no quoted price for the rights. Jen Company was advised that it would “lose out on the investment if it did not pay in the money for the rights.” Thus, on April 1, 2019, Jen Company paid for the new shares charging the payment to the investment account. Since Jen Company felt that it had been assessed by Jisoo Company, the dividends received from Jisoo Company in 2019 and 2020 (10% on December each year) are credited to the investment account until the debit was fully offset. On January 1, 2021, Jen Company received 50% stock dividend from Jisoo Company. On…