On January 1, 2020, Abbey acquires 90 percent of Benjamin's outstanding shares. Financial information for these two companies forthe years 2020 and 2021 follows (credit balances indicated by parentheses):20202021Abbey Company:SalesOperating expensesIntra-entity gross profits in ending inventory (included inabove figures)Benjamin Company:Dividend income-Benjamin CompanyOperating expensesDividends paidSales$ (710,000) $ (1,102,000)440,000666,000(125,000)(9,000)(222,000)(40,500)(328,000)202,000(10,000)(400,000)230,000(45,000)Assume that a tax rate of 21 percent is applicable to both companies.a. On consolidated financial statements for 2021, what are the income tax expense and the income tax currently payable if Abbey andBenjamin file a consolidated tax return as an affiliated group?b. On consolidated financial statements for 2021, what are the income tax expense and income tax currently payable if they choose tofile separate returns?

To calculate the consolidated income tax expense and currently payable for 2021, we need to follow…

Answered: On January 1, 2020, Abbey acquires 90…

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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P Co paid $140,000 for 70% interest in S CO.on 1/1/2019, when S had Capital Stock of $50,000 and Retained Earnings of $100,000. Fair values of net assets were the same as recorded book values. During 2019, S had income of $20,000, declared dividends of $7,500, On 31/12/2019, the P CO financial statements will show income from subsidiary for 2019 Amount? Select one: a. 12,500 b. 5, 250 c. 20, 000 d. 14,000
Revenues and operating (marketing and administrative) expenses for the year 2021 are P7,500,000 and P4,000,000 respectively. How much is the change in Retained Earnings for the year 2021 due to the equity securities indicate whether increase or decrease?
REQUIRED: How much purchases should be reported on the statement of comprehensive income for the year?
am. 122.
Please help me
WAG PAPALOKO Inc. has the following balance sheet on January 1, 2018, which is the date of acquisition: Assets Liabilities and Equity Accounts Receivable 79,000 Current Liabilities 145,000 Inventory 112,000 Long-term notes 100,000 Other current assets 55,000 Ordinary share, P1 par 50,000 Equipment (net) 294,000 Share premium 200,000 Goodwill 30,000 Retained earnings 75,000 Total assets 570,000 Total liabilities and equity 570,000 On January 1, 2018, WAG PAPATINAG Corp. acquired the net assets of WAG PAPALOKO Inc. by issuing 7,000 shares of its P25 par value common stock. Subsequently, WAG PAPALOKO Inc. was liquidated and its assets and liabilities merged into WAG PAPATINAG Corp. WAG PAPATINAG Corp. and WAG PAPALOKO Inc. stocks were selling for P40 per share and P6 per share, respectively on January 1, 2018. The book values of WAG PAPALOKO Inc.’s identifiable assets and liabilities equaled their…
On December 31, 2019, Akron, Inc., purchased 5 percent of Zip Company's common shares on the open maket in eiciarche for $16,000. On December 31,2020 , Akron, Inc., acquires an additional 25 percent of Zip Companys outstanding commen stociter $95,000. During the next two years, the following information is available for Zip Company. \table[[,Income,\table[[Dividends],[Declared]],\table[[Common Stock],[Fair Value],[(1231)
What amount of consolidated retained earnings will be reported on December 31, 2020?
On December 31, 2019, Akron, Inc., purchased 5 percent of Zip Company's common shares on the open market in exchange for $15,600. On December 31, 2020, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common stock for $97,000. During the next two years, the following information is available for Zip Company: Income Dividends Declared Common StockFair Value (12/31) 2019 $312,000 2020 $85,000 $7,900 388,000 2021 94,000 16,000 487,000 At December 31, 2020, Zip reports a net book value of $298,000. Akron attributed any excess of its 30 percent share of Zip's fair over book value to its share of Zip's franchise agreements. The franchise agreements had a remaining life of 10 years at December 31, 2020. Assume Akron applies the equity method to its Investment in Zip account: What amount of equity income should Akron report for 2021? On Akron’s December 31, 2021, balance sheet, what amount is reported for the Investment in Zip account?
On January 1, 2020, Churl Company paid $1,700,000 for a 40% stake in Flip Company. The Flip Company's stockholders equity on January 1 and December 31, 2020 is shown below: Share capital Revaluation surplus Retained earnings January 1 3,000,000 1,000,000 December 31 3,000,000 1,300,000 1,500,000 By Jan 1, 2020, all of Flip's identified assets and liabilities were recognized at fair value. During the current fiscal year, the flip firm recorded a profit before income tax of 1,000,000 and paid dividends to stockholders of 150,000. The revaluation excess is the outcome of Flip Company's land reassessment on December 31, 2020. Flip displays OCI net of any relevant income tax. Furthermore, Flip Company provides depreciation using the declining balance approach, whereas Churl Company employs a straight line. The cumulative depreciation would have been enhanced by 200,000 if Flip Company had used the straight line. The tax rate is set at 35%. On December 31, 2020, Churl Company will report its…
On January 1, 2020, MNO Company acquired 250,000 ordinary shares of PQR Company at P45 per share.At the time of purchase, PQR Company had outstanding1,000,000 shares with a carrying amount of P30,000,000. The following information pertains to year 2020: Net income of CD Company 3,100,500 MNO Company received cash dividend from PQRCompany 2.50 per ordinary share Market Value of PQR Company's shares 35 MNO Company has no significant influence and has elected irrevocably to measure the investment at fair value through other comprehensive income.How much is the unrealized gain/(loss) on financial asset-OCI at year-end?
B.On January 1, 2021, LASER LTD. acquired 70% of outstanding ordinary shares of JUSTICE INC. at a price of P210,000. On the same date, the net assets of JUSTICE INC. were reported at P260,000. On January 1, 2021, LASER LTD. reported retained earnings of P2,000,000 while JUSTICE INC. reported retained earnings of P200,000. All the assets and liabilities of JUSTICE INC. are fairly valued except machinery, which is undervalued by P80,000 and inventory which is overvalued by P10,000. The said machinery has remaining useful life of five years while 40% of the said inventory remained unsold at the end of 2021. For the year ended December 31, 2021, LASER LTD. reported net income of P1,000,000 and declared dividends of P200,000 in the separate financial statements while JUSTICE INC. reported net income of P150,000 and declared dividends of P20,000 in the separate financial statements. LASER LTD. accounted the investment in JUSTICE INC. using cost method in the separate financial statements.…

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