On December 31, 2021, Sleepy Corporation purchased for P40,000,000 cash all of the outstandingordinary shares of another entity when the subsidiary's statement of financial position showed net assetsof P32,000,000. The subsidiary's assets and liabilities had fair value different from the carrying amountas follows:Carrying amount50,000,0005,000,00030,000,000Fair valueProperty, plant and equipment, netOther assets57,500,000Long-term debt28,000,000What amount should be reported as goodwill in the December 31, 2021 consolidated statement offinancial position of the acquirer and its wholly-owned subsidiary?

Goodwill is the amount of the difference between the consideration paid for an acquisition and net…

On December 31, 2021, Sleepy Corporation purchased for P40,000,000 cash all of the outstanding ordinary shares of another entity when the subsidiary's statement of financial position showed net assets of P32,000,000. The subsidiary's assets and liabilities had fair value different from the carrying amount as follows: Property, plant and equipment, net Other assets Carrying amount 50,000,000 5,000,000 Fair value 57,500,000 Long-term debt 30,000,000 28,000,000 What amount should be reported as goodwill in the December 31, 2021 consolidated statement of financial position of the acquirer and its wholly-owned subsidiary?

On December 31, 2021, Sleepy Corporation purchased for P40,000,000 cash all of the outstanding ordinary shares of another entity when the subsidiary's statement of financial position showed net assets of P32,000,000. The subsidiary's assets and liabilities had fair value different from the carrying amount as follows: Property, plant and equipment, net Other assets Carrying amount 50,000,000 5,000,000 Fair value 57,500,000 Long-term debt 30,000,000 28,000,000 What amount should be reported as goodwill in the December 31, 2021 consolidated statement of financial position of the acquirer and its wholly-owned subsidiary?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Shohei Ltd owns 100% of Ohtani Ltd acquired on 1 July 2018 for $3 Million when the shareholders funds of Ohtani Ltd were: Share Capital 1,250,000 Retained Earnings 1,200,000 2,450,000 All assets of Ohtani Ltd were stated at fair value on the date of acquisition. (a) the directors believe that there has been an impairment loss on goodwill of $100,000 for the year ended 30 June 2021 (b) During the 2020-21 financial year Shohei Ltd sells inventory to Ohtani Ltd at a sales price of $800,000. The inventory cost Shohei Ltd $400,000 to produce. At 30 June 2021, 30% of the inventory is still on hand with Ohtani Ltd. The tax rate is 30% Record the consolidation entries for 30 June 2021
A Parent corporation purchased 25% of the outstanding common shares of Subsidiary Limited for $2,500,000 on January 1, 2020. The following relates to Subsidiary since the acquisition date: Year Net Income Other Comprehensive Income Dividends Paid 2020 $ 51,800 $11,400 $74,000 2021 148,000 29,600 74,000 Required: Assume that Parent is a private company. Even though it has significant influence, it chose to use the cost method to account for its investment. Prepare ALL the journal entries that Parent should make regarding this investment in Year 2020 and Year 2021
Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 35,000 shares of $7 par value common stock. The following information is provided on the assets and accounts payable transferred: Cost Book Value Fair Value Cash $ 32,000 $ 32,000 $ 32,000 Inventory 83,000 83,000 83,000 Land 69,000 69,000 99,000 Buildings 188,000 147,000 249,000 Equipment 95,000 74,000 123,000 Accounts Payable 58,000 58,000 58,000 Required: Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon Prepare the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab.
based on the information in the picture, In the consolidated statement of comprehensive income for the year ended December 31, 2021, how much is the consolidated net income attributable to the controlling interest? a. 1,980,000 b. 1,860,000 c. 1,830,000 d. 1,760,000
The PTCL Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares each valued at $1.50. The summary statement of the financial position of the subsidiary company immediately following the acquisition is: Fair value of assets acquired $2,640,000 Fair value of liabilities acquired $720,000 Total shareholders’ equity of the subsidiary company $800,000 Retained earnings of the subsidiary company $1,120,000 Required: (a) Pass the necessary journal entry to record the acquisition (b) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition (c) Pass the necessary consolidation entry to eliminate the subsidiary by the parent company (d) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchase consideration paid was $1,000,000 cash and 400,000 shares each valued at $1.50.Thanks
On January 1, 2016, Parent Company purchased for P6,500,000 65% of the outstanding shares of Subsidiary Company. On this date, the assets of Subsidiary Company have a book value P10,000,000 while their liabilities have book values of P2,000,000. All of Subsidiary Company’s assets approximated their fair values except for Machinery and Land which were understated by P25,000 and P75,000 each respectively and a Liability which was overstated by P10,000. Parent and Subsidiary each have 100,000 shares outstanding and their shares are currently trading in the stock market at P250 and P125 per share to Parent and Subsidiary each, respectively. The non-controlling interest is valued at fair value. What is the the increase in the total assets of Parent because of the acquisition?
On January 2, 2022, Parent Company purchased 90% of the outstanding shares of Subsidiary Company by paying P300,000. On this date, Subsidiary had Share Capital and Retained Earnings amounting to P150,000 and P230,000 respectively. Also, on this date, an equipment was undervalued by P20,000 with remaining useful life of 10 years. On the same date, Parent had P1,000,000 of Share Capital and P700,000 of Retained Earnings. The parent opted to measure the NCI using proportionate share. Parent and Subsidiary reported the following for the year ended December 31, 2022 (see image below).On July 31, 2022, Parent sold a machinery with a 5-year remaining useful life costing P1,500,000 with accumulated depreciation of P1,000,000 for P530,000 to Subsidiary. Questions:a. How much is the Consolidated Retained Earnings at December 31, 2022? b. How much is the Consolidated Net Income? .....