On February 1, 20x1, Paco Corp, acquired outstanding ordinary shares of School Inc. for cash. The incomplete working paper elimination entries on that date for the consolidated of statement of financial position of Paco Corp, and School Inc. are shown below: WPEE 1 Shareholders' equity - School Inc. 1,453,500 Investment in School Inc. 1,235,475 Non-controlling interest 218.025 WPEE 2 Inventories 33,150 Equipment 280,500 Goodwill Investment in School Inc. 349,775 Non-controlling interest Assuming NCI is measured at fair value, the cash consideration includes control premium of P20,000, what is the amount of goodwill? 97.850 125.000 117.850 94.321

On February 1, 20x1, Paco Corp, acquired outstanding ordinary shares of School Inc. for cash. The incomplete working paper elimination entries on that date for the consolidated of statement of financial position of Paco Corp, and School Inc. are shown below: WPEE 1 Shareholders' equity - School Inc. 1,453,500 Investment in School Inc. 1,235,475 Non-controlling interest 218.025 WPEE 2 Inventories 33,150 Equipment 280,500 Goodwill Investment in School Inc. 349,775 Non-controlling interest Assuming NCI is measured at fair value, the cash consideration includes control premium of P20,000, what is the amount of goodwill? 97.850 125.000 117.850 94.321

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter14: Intercorporate Investments In Common Stock

Section: Chapter Questions

Problem 30P

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On February 1, 20x1, Paco Corp. acquired outstanding ordinary shares of School Inc. for cash. The incomplete working paper elimination entries on that date for the consolidated of statement of financial position of Paco Corp. and School Inc. are shown below: WPEE 1 Shareholders' equity - School Inc. 1,453,500 Investment in School Inc. 1,235,475 Non-controlling interest 218,025 WPEE 2 Inventories 33,150 Equipment 280,500 Goodwill ? Investment in School Inc. 349,775 Non-controlling interest ? Assuming NCI is measured at NCI proportionate share, the cash consideration excludes control premium amounting to P25,000, what is the amount of goodwill?
On February 1, 20x1, Paco Corp. acquired outstanding ordinary shares of School Inc. for cash. The incomplete working paper elimination entries on that date for the consolidated of statement of financial position of Paco Corp. and School Inc. are shown below: WPEE 1 Shareholders' equity - School Inc. 1,453,500 Investment in School Inc. 1,235,475 Non-controlling interest 218,025 WPEE 2 Inventories 33,150 Equipment 280,500 Goodwill ? Investment in School Inc. 349,775 Non-controlling interest ? Assuming NCI is measured at fair value, the cash consideration includes control premium of P20,000, what is the amount of goodwill?
PROBLEM V. On January 2, 2020, P Company acquired 80% interest in S Company for P4,125,000 cash. On this date, the outstanding ordinary share capital and accumulated profits of P Company and S Company are as follows: P Company S Company Ordinary share capital P2,250,000 P1,312,000 Share premium 1,500,000 Accumulated profits (losses) 5,250,000 3,187,500 There was no issuance of ordinary shares during the year. Noncontrolling interest is initially measured at fair value. Fair value of the following assets of S Company exceeded their book values as follows: Inventories, P210,000; Property and equipment (remaining useful life 10 years), P127,500. All other assets and liabilities are fairly valued. Goodwill if any is not impaired. On December 31, 2020, the two companies reported the following operating results: P Company S Company Net income P1,785,000 P975,000 Dividends paid 525,000 262,500 1. Compute for the consolidated shareholders' equity.
PROBLEM IV. On January 2, 2019, Klaus Company (qualified as SME) acquired 80% interest in Marcel Company for P4,125,000 cash. On this date, the outstanding ordinary share capital and accumulated profits of Klaus Company and Marcel Company are as follows: Klaus Marcel Ordinary share capital P 2,250,000 P 1,312,000 Share premium 1,750,000 Accumulated profits (losses) 5,520,000 3,187,500 There was no issuance of ordinary shares during the year. Fair value of the following assets of Marcel exceeded their book values as follows: Inventories, P210,000; Property and equipment (useful life, 10 years), P127,500. All other assets and liabilities are fairly valued. On December 31, 2019, the two companies reported the following operating results: Klaus Marcel Net income P 1,825,000 P 975,000 Dividends paid 525,000 262,500 1. Consolidated shareholders' equity reported in the consolidated statement of financial position on 12/31/19
Required information On January 1, 20X2, Power Company acquired 80 percent of Strong Company's outstanding stock for cash. The fair value of the noncontrolling interest was equal to a proportionate share of the book value of Strong Company's net assets at the date of acquisition. Selected balance sheet data at December 31, 20X2 are as follows: Total Assets Liabilities Common Stock Retained Earnings Total Liabilities & Stockholders' Equity Multiple Choice O $35,200 Based on the preceding information, what amount should be reported as noncontrolling interest in net assets in Power Company's December 31, 20X2, consolidated balance sheet? $48,200 $76,800 Power $ 564,000 O $112,800 180,000 150,000 234,000 $ 564,000 Strong $ 216,000 65,000 80,000 96,000 $ 241,000
Question 3: On June 10, 20X8, Tower Corporation acquired 100 percent of Brown Company's common stock. Summarized balance sheet data for the two companies immediately after the stock acquisition are as follows: Item Cash Accounts Receivable Inventory Buildings & Equipment (net) Investment in Brown Stock Total Accounts Payable Bonds Payable Common Stock Retained Earnings Total Tower Corp. $ 15,000 30,000 80,000 120,000 100,000 $345,000 $ 25,000 150,000 55,000 115,000 $345,000 Brown Company Book Value $ 5,000 10,000 20,000 50,000 $85,000 $3,000 25,000 20,000 37,000 $85,000 Fair Value $5,000 10,000 25,000 70,000 $110,000 $3,000 25,000 $ 28,000 Required: Give the consolidation entries required to prepare a consolidated balance sheet immediately after the acquisition of Brown Company shares. Worksheet is not required.
Problem 16-13 (AICPA Adapted) 000.0E7 Presumptuous Company revealed the following information pertaining to dividends from nontrading investments in ordinary shares during the year ended December 31, 2021: The entity owned a 10% interest in Beal Company, which declared a cash dividend of P500,000 on November 30, 2021 to shareholders of record on December 31, 2021 and payable on January 15, 2022. On October 15, 2021, the entity received a liquidating dividend of P100,000 from Clay Mining Company. The entity owned a 5% interest in Clay Mining Company. What amount of dividend income should be reported for the current year? a. 500,000 b. 600,000 C. 150,000 d. 50,000 493
QUESTION 4 On 1 January 2018, Chelsea Ltd acquired 75% of the shares in Orlando Ltd at N$126 000. At that date, the balance on Orlando Ltd's retained earnings account amounted to N$36 000. The share capital amounted to N$120 000 and no shares have been issued since that date. The following are the condensed financial statements of Chelsea Ltd and subsidiary Orlando Ltd at 31 December 2020. STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2020 Chelsea Ltd Orlando Ltd N$ N$ ASSETS Property, plant and equipment 168 000 105 000 Investment in Orlando Ltd at fair value 180 000 Trade receivables 87 000 156 000 Total assets 435 000 261 000 EQUITY AND LIABILITIES Share capital 240 000 120 000 Mark-to-market reserve 54 000 Retained earnings Long-term borrowings Trade and other payables Total equity and liabilities 54 000 54 000 30 000 6 000 57 000 81 000 435 000 261 000
Question Three P Co has owned 75% of the 100,000 shares of S Co since the incorporation of that company. During the year to 31 December 20X2, S Co sold goods costing GHS16,000 to P Co at a price of GHS20,000 and these goods were still unsold by P Co at the end of the year. Draft statements of financial position of each company at 31 December 20X2 were: Required: Prepare the consolidated statement of financial position of P Co at 31 December 20X2. The fair value of the non-controlling interest at acquisition was GHS25,000.
Question 2 MegaBite Ltd acquired 80% of the shares of SmallBite two years ago when the reserves stood at S13 000. Draft statements of financial position as at 2018 November 30 for cach company are as follows: MegaBite Ltd SmallBite Ltd mi li Non-current assets Tangible assets Investment in Tropical Blue at cost 51 000 212 000 58 000 270 000 51 000 Current Assets Total assets 106 000 376 000 38 000 89 000 Equity Ordinary Shares at SI cach Retained earnings 201 000 L19 000 320 000 38 000 28 000 66 000 Current Liabilities 56 000 _376 000 23 000 89 000 Total equity and liabilities Additional information: i. During the year, SmallBite Ltd sold goods to MegaBite Ltd for $120 000, the profit Tropical Blue being 25% of selling price. At the period end, $40 000 of these goods remain unsold in the inventories of MegaBite Ltd. to ii. At 2018 November 30, MegaBite Ltd owed SmallBite Ltd $20 000 for goods bought and this debt is included in the trade payables of MegaBite Ltd and the receivables of…
QUESTION 13 On January 1, 20X7, Poke Corporation acquired 25 percent of the outstanding shares of Shove Corporation for $100,000 cash. Shove Company reported net income of $75,000 and paid dividends of $30,000 for both 20X7 and 20X8. The fair value of shares held by Poke was $110,000 and $105,000 on December 31, 20X7 and 20X8 respectively.Based on the preceding information, what amount will be reported by Poke as income from its investment in Shove for 20X8, if it used the equity method of accounting? $11,250 $7,500 $26,250 $18,750
INVESTMENT IN ASSOCIATE 1. On January 1, 2021 Dona Company purchased 10% of another entity’s outstanding ordinary shares for P6,000,000. The investment classified as nonmarketable equity security and accounted for under the cost method. The following data pertain to investee’s operations for 2021 and 2022:2021 2022Net income 3,000,000 4,000,000Dividend paid none 9,000,000 What amount should Dona Company report as dividend income in its 2022 income statement?