not use ai please On January 1, 2024, Parrot Corporation acquired Seeds Company's 300,000outstanding common shares, $10 par, for $4,500,000 (Total outstanding commonshares 1,000,000). At the date of acquisition, Seeds reported common stockoutstanding of $10,000,000 and retained earnings of $10,000,000. The book value ofSeeds' net assets approximated market value except for inventory understated$120,000 and patents ($2,000,000 initially purchased on December 31 2021, 10 yearseconomic useful years) understated $1,000,000. The inventory will be used over thefirst three months. <At the year end of 2024, Stock price of Seeds has increased by 20%.<For 2024, Some items of Income Statement are reported: <Net incomeParrot$1,800,000Seeds1,200,000Dividends Declared$ 500,000650,000Dividend Paid300,000450,000<Required:<1. Calculate Parrot's investment in Seeds at the year end of 2024 if Parrot canexercise significant influence over seeds. (5 Points)<2. Calculate Parrot's investment in Seeds at the year end of 2024 if Parrot cannotexercise significant influence over seeds. (5 Points)<3. Prepare all related Journal entries for Parrot and Seeds during 2024. (10 Points)<

Solution Overview:Parrot Corporation acquired 30% of Seeds Company's outstanding common shares on…

Answered: On January 1, 2024, Parrot Corporation…

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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On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. Theconsideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shareswith a market price of P45 per share.The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for thefollowing:• Merchandise inventory’s fair value is lower than the book balance by 150,000.• Equipment-A, with 2 years remaining useful life, costing P300,000 is understated byP50,000.• Land with a fair value of P500,000 is recognized in the books amounting to P350,000.The following events happened to Luna Corp.• Equipment-A was sold in June 30, 2023 for P320,000.• 60% of merchandise inventory were sold in 2022.• There is no movement as to the ordinary shares of Luna Corp during the year.The unadjusted trial balance as of December 31, 2022 were as follows:Lucas Company Luna CorpCash 2,240,000 1,800,000Trade Receivables 1,000,000 960,000Merchandise Inventory 2,320,000…
On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. Theconsideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shareswith a market price of P45 per share.The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for thefollowing:• Merchandise inventory’s fair value is lower than the book balance by 150,000.• Equipment-A, with 2 years remaining useful life, costing P300,000 is understated byP50,000.• Land with a fair value of P500,000 is recognized in the books amounting to P350,000.The following events happened to Luna Corp.• Equipment-A was sold in June 30, 2023 for P320,000.• 60% of merchandise inventory were sold in 2022.• There is no movement as to the ordinary shares of Luna Corp during the year.The unadjusted trial balance as of December 31, 2022 were as follows:Lucas Company Luna CorpCash 2,240,000 1,800,000Trade Receivables 1,000,000 960,000Merchandise Inventory 2,320,000…
On May 31, 2018, Armstrong Company paid $3,500,000 to acquire all of the common stock of Hall Corporation, which became a division of Armstrong. Hall reported the following balance sheet at the time of the acquisition: Current assets $ 900,000 Current liabilities $ 600,000 Noncurrent assets 2,700,000 Long-term liabilities 500,000 Stockholders’ equity 2,500,000 Total liabilities and Total assets $3,600,000 stockholders’ equity $3,600,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Hall was $3,100,000. At December 31, 2018, Hall reports the following…
On May 31, 2018, Armstrong Company paid $3,500,000 to acquire all of the common stock of Hall Corporation, which became a division of Armstrong. Hall reported the following balance sheet at the time of the acquisition: Current assets $ 900,000 Current liabilities $ 600,000 Noncurrent assets 2,700,000 Long-term liabilities 500,000 Stockholders' equity 2,500,000 Total liabilities and Total assets $3,600,000 stockholders' equity $3,600,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Hall was $3,100,000. At December 31, 2018, Hall reports the following balance sheet information: Current assets $ 800,000 Noncurrent assets (including goodwill recognized in purchase) 2,600,000 Current liabilities (700,000) Long-term liabilities (500,000) Net assets $2,200,000 It is determined that the fair value of the Hall division is $2,300,000. Instructions (a) Compute the amount of goodwill recognized, if any, on May 31, 2018. (b) Determine the…
On January 1, 2021, Parent Co. acquired 80% of Subsidiary Inc.'s outstanding stocks for P1,600,000 cash. Subsidiary Inc's balance sheet shows P3,000,000 identifiable assets and P1,800,000 liabilities. All assets and liabilities of Setter are fairly valued, except for an undervalued equipment. The stock acquisition resulted to a goodwill of P700,000. Assume Parent had P5,100,000 total assets prior to the said transaction. NCI is measured at fair value. How much is the total assets in the consolidated balance sheet after the stock acquisition?
On January 1, 2021, PCO purchased 70% ownership of SCO which resulted to a gainon acquisition of P100,000. Net assets of SCO were fairly valued except for inventorywhich was understated by P1,500,000. A third of these inventories remained unsoldas of the end of the calendar year.The operations of the two companies for 2021 are as follows:PCO SCOSales P3,100,000 P2,600,000(COGS) (1,300,000) (1,250,000)Gross profit 1,800,000 1,350,000(OPEX) (200,000) (150,000)1,550,0003,550,0001,850,0003,250,000Other income 0 200,000(Other expenses) (120,000) 0Net income P1,480,000 P 400,000In the consolidated statement of comprehensive income for the year endedDecember 31, 2021, how much is the cost of goods sold? A. 1,550,000B. 3,550,000C. 1,850,000D. 3,250,000 based on the information above, In the consolidated statement of comprehensiveincome for the year ended December 31, 2021, how much is the consolidated netincome attributable to the controlling interest? 1,830,0001,980,0001,760,0001,860,000
On May 31, 2021, Ivanhoe Company paid $3,640,000 to acquire all of the common stock of Oriole Corporation, which became a division of Ivanhoe. Oriole reported the following balance sheet at the time of the acquisition: Current assets $  936,000 Current liabilities $  624,000 Noncurrent assets 2,808,000 Long-term liabilities 520,000 Stockholder's equity 2,600,000 Total assets $3,744,000 Total liabilities and  stockholder's equity $3,744,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Oriole was $3,224,000. At December 31, 2021, Oriole reports the following balance sheet information: Current assets $  832,000 Noncurrent assets (including goodwill recognized in purchase) 2,496,000 Current liabilities (728,000 ) Long-term liabilities (520,000 ) Net assets $2,080,000 It is determined that the fair value of the Oriole division is $2,288,000. 1).…
On May 31, 2021, Armstrong LTD paid $3,500,000 to acquire all of the common stock of Hall Corporation, which became a division of Armstrong. Hall reported the following balance sheet at the time of the acquisition: Current assets $   900,000    Noncurrent assets 2,700,000 Total assets $3,600,000 Current liabilities $   600,000 Long-term liabilities 500,000 Stockholders’ equity 2,500,000 Total liabilities and stockholders’ equity $3,600,000    It was determined at the date of the purchase that the fair value of the identifiable net assets of Hall was $3,100,000. At December 31, 2021, Hall reports the following balance sheet information: Current assets $800,000 Noncurrent assets (including goodwill recognized in purchase) 2,400,000 Current liabilities (700,000) Long-term liabilities (500,000) Net assets $2,000,000 It is…
On January 1, 2017, Sparky Co. acquired 80% of the outstanding stock of Panda Co. for P225,000 cash. Relevant information for Panda Co. on this date is as follows: Inventory              120,000 Land              240,000 Goodwill               10,000 Liabilities               30,000 Common Stock, P100 par              240,000 Retained earnings              100,000 At acquisition date, the book values of Panda Co.’s net identifiable assets and liabilities approximated their fair values. What amount shall be assigned to the minority interest on January 1, 2017? Group of answer choices Cannot be determined 66,000 56,250 68,000 PreviousNext
On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shares with a market price of P45 per share. The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for the following: • Merchandise inventory’s fair value is lower than the book balance by 150,000. • Equipment-A, with 2 years remaining useful life, costing P300,000 is understated by P50,000. • Land with a fair value of P500,000 is recognized in the books amounting to P350,000. The following events happened to Luna Corp. • Equipment-A was sold in June 30, 2023 for P320,000. • 60% of merchandise inventory were sold in 2022. • There is no movement as to the ordinary shares of Luna Corp during the year. The unadjusted trial balance as of December 31, 2022 were as follows: Lucas Company Luna Corp Cash 2,240,000 1,800,000 Trade Receivables 1,000,000 960,000 Merchandise Inventory…
On May 31, 2021, Oriole Company paid $3,675,000 to acquire all of the common stock of Pharoah Corporation, which became a division of Oriole. Pharoah reported the following balance sheet at the time of the acquisition: Current assets $ 945,000 Current liabilities $ 630,000 Noncurrent assets 2,835,000 Long-term liabilities 525,000 Stockholder's equity 2,625,000 Total assets $3,780,000 Total liabilities and stockholder's equity $3,780,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Pharoah was $3,255,000. At December 31, 2021, Pharoah reports the following balance sheet information: Current assets $ 840,000 Noncurrent assets (including goodwill recognized in purchase) 2,520,000 Current liabilities (735,000 ) Long-term liabilities (525,000 ) Net assets $2,100,000 It is determined that the fair value of the Pharoah division is $2,310,000.…
On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shares with a market price of P45 per share. The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for the following: Merchandise inventory’s fair value is lower than the book balance by 150,000. Equipment-A, with 2 years remaining useful life, costing P300,000 is understated by P50,000. Land with a fair value of P500,000 is recognized in the books amounting to P350,000. The following events happened to Luna Corp. Equipment-A was sold in June 30, 2023 for P320,000. 60% of merchandise inventory were sold in There is no movement as to the ordinary shares of Luna Corp during the The unadjusted trial balance as of December 31, 2022 were as follows: Lucas Company Luna Corp Cash 2,240,000 1,800,000 Trade Receivables 1,000,000 960,000 Merchandise…

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