08) Nina acquired a 75% controlling interest in Pinta in two stages.1) In 2012, Nina acquired 15% equity interest for cash considerationof $10,000. Nina classified the interest as available for- sale under IAS 39.From 2012 to the end of 2014, Nina reported fair value increases of $2,000in other comprehensive income (OCI)2) On January 2014, Nina acquired a further 60% equity for a cashconsideration of $60,000. Nina identified net assets of Pinta with a fairvalue of $80,000.Nina elected to measure non-controlling interest at their share of net assets.On the date of the acquisition, the previously-held 15% interest had a fair valueof $12,500.Calculate the cost of investment that will be used in computing goodwillSelect one:a.$60,000O b. $10,000O c. $80,000O d. $70,000

Goodwill - Goodwill is the difference between the fair market value of all the assets acquired…

Nina acquired a 75% controlling interest in Pinta in two stages. 1) In 2012, Nina acquired 15% equity interest for cash consideration of $10,000. Nina classified the interest as available-for- sale under IAS 39. From 2012 to the end of 2014, Nina reported fair value increases of $2,000 in other comprehensive income (OCI) 2) On January 2014, Nina acquired a further 60% equity for a cash oration of $60.000 Nino identified: Dinto with fair

Nina acquired a 75% controlling interest in Pinta in two stages. 1) In 2012, Nina acquired 15% equity interest for cash consideration of $10,000. Nina classified the interest as available-for- sale under IAS 39. From 2012 to the end of 2014, Nina reported fair value increases of $2,000 in other comprehensive income (OCI) 2) On January 2014, Nina acquired a further 60% equity for a cash oration of $60.000 Nino identified: Dinto with fair

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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BuyCo, Inc., holds 20 percent of the outstanding shares of Marqueen Company and appropriately applies the equity method of accounting. Excess cost amortization (related to a patent) associated with this investment amounts to $11,900 per year. For 2020, Marqueen reported earnings of $117,000 and declares cash dividends of $34,000. During that year, Marqueen acquired inventory for $48,000, which it then sold to BuyCo for $80,000. At the end of 2020, BuyCo continued to hold merchandise with a transfer price of $33,000. What Equity in Investee Income should BuyCo report for 2020? How will the intra-entity transfer affect BuyCo’s reporting in 2021? If BuyCo had sold the inventory to Marqueen, would the answers to (a) and (b) have changed?
Harry acquires 100% of David on January 1, 2010 by issuing 10,000 shares with par value $1 and fair value $70. In addition, Harry agrees to pay an additional $100,000 if David earns $50,000 net income in 4 years. David will be operated as a separate subsidiary of Harry. At acquisition date, there is a 80% probability of this occurring. On January 1, 2010, Harry had net assets with book value of $400,000 and fair value of $500,000. At that date, David had net assets with book value of $200,000 and fair value of $150,000. At December 31, 2012, Harry has net assets with book value of $600,000 and fair value of $800,000. At that date, David has net assets with book value of $300,000 and fair value of $400,000. Assume that all differences between book value and fair value relate to Land. a. Ho w much is goodwill at January 1, 2010 (show calculation). b. How much is goodwill at December 31, 2012 (assume no impairment)
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On 1 January 2017, Al Yousef Group acquired 30% of the outstanding voting shares of Saleh Enterprises for OMR 2,000,000 in cash, a price that was equal to 30% of Saleh's net assets. The investment gave Al Yousef significant influence over Saleh. During the year ending December 31, 2017, Saleh had Net Income of OMR 200,000 and paid dividends of OMR 40,000. For the year ending December 31, 2018, Saleh had a net income of OMR 250,000, and paid dividends of OMR 50,000. For the year ending December 31, 2019, Saleh's business started to have some operational issues that they had a Net Loss of OMR 25,000, however they still managed to pay dividends of OMR 10,000. For the year ending December 31, 2020, because of COVID-19, Saleh had a Net Loss of OMR 50,000 and no dividends have been paid for 2020. Please answer the following questions pertaining to Al Yousef Company: Questions No. 32, 33 and 34 What will be the journal entry to record the purchase of Saleh's shares on 1 January 2017? a. Dr.…
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On July 1, 2019, Killearn Company acquired 105,000 of the outstanding shares of Shaun Company for $19 per share. This acquisition gave Killearn a 40 percent ownership of Shaun and allowed Killearn to significantly influence the investee's decisions. As of July 1, 2019, the investee had assets with a book value of $5 million and liabilities of $1,101,500. At the time, Shaun held equipment appraised at $280,000 more than book value; it was considered to have a seven-year remaining life with no salvage value. Shaun also held a copyright with a five-year remaining life on its books that was undervalued by $650,000. Any remaining excess cost was attributable to goodwill. Depreciation and amortization are computed using the straight-line method. Killearn applies the equity method for its investment in Shaun. Shaun's policy is to declare and pay a $1 per share cash dividend every April 1 and October 1. Shaun's income, earned evenly throughout each year, was $640,000 in 2019, $670,600 in 2020,…