net share in the profit of the associate would b
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On July 1, 20X1, ABC acquired 25% of the outstanding ordinary shares of Yellow Corp at a total cost of P7,000,000. Net assets of Yellow was only P6,000,000. Yellow's
The carrying amount of the investment account at Dec 31, 20X1 would be:
7,000,000
7,397,500
7,412,500
8,087,500
On July 1, 20X1, ABC acquired 25% of the outstanding ordinary shares of Yellow Corp at a total cost of P7,000,000. Net assets of Yellow was only P6,000,000. Yellow's depreciable assets (10-year remaining life) has a fair value of P600,000 more than the book value. Yellow earned net profit of P5,400,000 evenly throughout the year. Yellow paid cash dividends of P1,050,000 at Dec 31, 20X1.
The net share in the profit of the associate would be:
660,000
675,000
690,000
1,350,000
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Solved in 2 steps
- In July 1, 20X1, CBC acquired 25% of the outstanding ordinary shares of Yellow Corp at a total cost of P7,000,000. Net assets of Yellow was only P6,000,000. Yellow's depreciable assets (10-year remaining life) has a fair value of P600,000 more than the book value. Yellow earned net profit of P5,400,000 evenly throughout the year. Yellow paid cash dividends of P1,050,000 at Dec 31, 20X1. The carrying amount of the investment account at Dec 31, 20X1 would be: 7,000,000 7,397,500 7,412,500 8,087,500On July 1, 20X1, ABC acquired 25% of the outstanding ordinary shares of Yellow Corp at a total cost of P7,000,000. Net assets of Yellow was only P6,000,000. Yellow's depreciable assets (10-year remaining life) has a fair value of P600,000 more than the book value. Yellow earned net profit of P5,400,000 evenly throughout the year. Yellow paid cash dividends of P1,050,000 at Dec 31, 20X1. The entry to record the acquisition of Yellow's ordinary shares would include: Dr Goodwill 850,000 Dr Investment in FVPL 7,000,000 Dr Investment in associate 7,000,000 Dr Investment in associate 7,150,000On July 1, 20x6 TRUST Company purchased 80% of the outstanding shares of DUREX Company at a cost of Pl,600,000. on that date, DUREX had P1,000,000 of capital stock and P1,400,0a00 of retained earnings. For 20x6, TRUST had income of P560,000 from its separate operations and paid dividends of P300,000. For 20x6, DUREX reported income of P130,000 and paid dividends of P60,000. All the assets and liabilities of DUREX have book values equal to their respective fair market values. Assume income was earned evenly throughout the year except for the intercompany transaction on October 1. On October 1, TRUST purchased an equipment from DUREX for P200,000. The book value of the equipment on that date was P240,000. The loss of P40,000 is reflected in the income of DUREX indicated above. The equipment is expected to have a useful life of 5 years from the date of sale. In the December 31, 20x6 consolidated statement of financial position, how much is the consolidated net income attributable to the…
- On Jan 1, 20X8, Banawe Company purchased 80% of the outstanding shares of Malate Company at a cost of P4,000,000. On that date, Malate had P2,500,000 of capital stock and P3,500,000 of retained earnings. For 20X8, Banawe had income of P1,400,000 form its separate operations and paid dividends of P750,000. Malate on the other hand reported income of P325,000 and paid dividends of P150,000 on December 1, 20X8. All the assets and liabilities of Malate have book values equal to their fair market values. Assume all income was earned evenly throughout the year except for an intercompany transaction on October 1, 20X8 when Banawe purchased a machinery from Malate for P500,000. The book value of the machinery on that date amounted to P600,000 and accumulated depreciation of P400,000 and is already reflected in the income of Malate indicated above. The machinery is expected to have a remaining useful life of 5 years from the date of sale. In the December 31, 20X8 consolidated financial…On Jan 1, 20X8, Banawe Company purchased 80% of the outstanding shares of Malate Company at a cost of P4,000,000. On that date, Malate had P2,500,000 of capital stock and P3,500,000 of retained earnings. For 20X8, Banawe had income of P1,400,000 form its separate operations and paid dividends of P750,000. Malate on the other hand reported income of P325,000 and paid dividends of P150,000 on December 1, 20X8. All the assets and liabilities of Malate have book values equal to their fair market values. Assume all income was earned evenly throughout the year except for an intercompany transaction on October 1, 20X8 when Banawe purchased a machinery from Malate for P500,000. The book value of the machinery on that date amounted to P600,000 and accumulated depreciation of P400,000 and is already reflected in the income of Malate indicated above. The machinery is expected to have a remaining useful life of 5 years from the date of sale. In the December 31, 20X8 consolidated financial…On Jan 1, 20X8, Banawe Company purchased 80% of the outstanding shares of Malate Company at a cost of P4,000,000. On that date, Malate had P2,500,000 of capital stock and P3,500,000 of retained earnings. For 20X8, Banawe had income of P1,400,000 form its separate operations and paid dividends of P750,000. Malate on the other hand reported income of P325,000 and paid dividends of P150,000 on December 1, 20X8. All the assets and liabilities of Malate have book values equal to their fair market values. Assume all income was earned evenly throughout the year except for an intercompany transaction on October 1, 20X8 when Banawe purchased a machinery from Malate for P500,000. The book value of the machinery on that date amounted to P600,000 and accumulated depreciation of P400,000 and is already reflected in the income of Malate indicated above. The machinery is expected to have a remaining useful life of 5 years from the date of sale. In the December 31, 20X8 consolidated financial…
- On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits. For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value. On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date. For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company. What is the Non-controlling Interest in Net Assets of Subsidiary as of December 31, 20x2?On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits. For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value. On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date. For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company. Compute the amount to be shown as consolidated net income.On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits.For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value.On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date.For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company.REQUIREMENTS: c. Non-controlling Interest in Net Income of Subsidiary for 20x2. d. Non-controlling Interest in Net Assets of Subsidiary as of December 31, 20x2.
- On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits.For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value.On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date.For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company.REQUIREMENTS: a. Amount to be shown as consolidated net income. b. Net income attributable to owners of the parent.On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits. For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value. On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date. For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company. Compute the Non-controlling Interest in Net Income of Subsidiary for 20x2.On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits. For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value. On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date. For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company. Prepare the elimination entries for 20x2.