On January 1, 20x1, Rooster Co. acquired 75% interest in Cockerel Co, for P600,000. At this time, Cockerel's net identifiableassets have a carrying amount of P720,000 which approximates fair value. NCI was assigned a fair value of P220,000. During20x1, Rooster sold goods to Cockerel for P600,000, having bought them for P480,000. A quarter of these goods remainunsold at year-end. Goodwill on acquisition of Cockerel has been tested for impairment and found to be impaired (in total)by P32,000 for the current year.The individual statements of profit or loss and other comprehensive income of the entities for the year ended December 31,20x1 are shown below:RoosterCo.4,000,000(1,600,000)2,400,00040,000(B00,000)(320,000)1,320,000(384,000)936,000296.0001,232,000CockerelCo.2,800,000(1,200.000)1,600,000RevenueCost of salesGross profntDividend income from Cockerel Co.Distributicn costs(400,000)(200,000)1,000,000(300,000)700,000100,000800,000Administrative costsProfit before taxIncome tax expenseProfit after taxOther comprehensive incomeComprehensive IncomeHow much is the profit attributable to owners of the parent?

The portion of the period's consolidated profit or loss that is attributable to the parent, net of…

Answered: On January 1, 20x1, Rooster Co.…

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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Part B Boromir Ltd owns 100% of Samwise Ltd, which in turn owns 100% of Saruman Ltd. During the financial reporting period, Boromir Ltd sells inventory to Samwise Ltd at a sales price of $350,000, which cost Boromir Ltd $200,000 to produce. Samwise Ltd subsequently sells the same inventory to Saruman Ltd for $400,000 without incurring any additional costs. By the end of the financial reporting period, Saruman Ltd has sold half of this inventory to companies outside the group for $450,000, and kept the remining half of the inventory on hand. Required: a) From the economic entity’s perspective (ie. the group’s perspective), determine the sales revenue for the financial reporting period, and explain your answer. Type your answer here b) From the economic entity’s perspective (ie. the group’s perspective), determine the value of closing inventory for the financial reporting period, and explain your answer. Type your answer here
Par Corporation, a Canadian company, purchased 80% of the outstanding shares of Sub Company of Germany on December 31, Year 5 for €3,000,000 Euros. At that date, the carrying values of Sub’s assets and liabilities were equal to fair values. There was a goodwill impairment loss in Year 6 of €10,000. The fiscal Year 5 financial statements of Sub were as follows: Sub Company Balance Sheet December 31, Year 5 Cash € 500,000 Accounts receivable 900,000 Inventory 1,200,000 Capital assets (net) 3,250,000 € 5,850,000 Accounts payable € 650,000 Bonds payable 1,700,000 Common shares 2,000,000 Retained earnings 1,500,000 € 5,850,000 Par anticipated that there would be a high volume of intercompany transactions with Sub, because Par provides the raw materials to Sub and sales are global. Also Sub obtained most of its financing thru banks in Canada. Par uses the cost method to account for its investment in Sub. The fiscal Year 6 financial statements of Par and Sub were as follows: Balance Sheets…
Jam Ltd acquired all the equity in Cab Ltd on 31 December 20X4 for $360 000. At the control date, the equity of Cab was recorded as Paid-up capital of $260 000 and Retained profits of $30 000. The purchase price was based on the agreed fair values of Cab's identifiable assets and liabilities on that date. The following items were not at fair value in Cab's financial statements on the control date. Inventory Property (Cost of $250 000, Accumulated depreciation of $40 000) Carrying amount ($) 32 000 210 000 Fair value ($) 24 000 252 000 Other information: • Both Cab and the group entity account for its property by the cost model, and apply straight-line depreciation to the property. The property in Cab Ltd is expected to have a remaining life of 21 years from 31 December 20X4, and no residual value. Cab sold goods to Jam for $5,000 during FY20X5, the cost of these inventories was 4,000. All these inventories were still on hand by Jam by 31 December 20X5, the year-end. . Required: Prepare…
On January 1, 20X8, Plum Company acquired all of the outstanding stock of Snap PLC, a British Company, for $300,000. Snap's net assets on the date of acquisition were 220,000 pounds ( £ ). On January 1,2018, the book and fair values of the Snap's identifiable assets and liabilities approximated their fair values except for equipment. The remaining useful life of Snap's equipment at January 1,20×8, was 10 years. During 20X8, Snap earned 80,000 pounds in income and declared and paid 10,000 pounds in dividends. The dividends were declared and paid in pounds on November 1,20×8. Plum's income from its own operations was $160,000 for 20X8. Plum's total stockholders' equity on January 1,20×8 was $1,100,000. It declared $90,000 of dividends during 20X8. Assume Plum uses the fully adjusted equity method to account for its investment in Snap. Management has determined that the pound is Snap's appropriate functional currency. Relevant exchange rates were as follows: January 1,20×8,$1.20=1£…
On December 31, Phoenix Corporation acquired all of Sedona Corporation’s voting stock in exchange for $560,000 cash. At the acquisition date, the fair values of Sedona’s assets and liabilities equaled their carrying values, except that the fair value of the inventory was $20,000 lower than the carrying value, the fair value of the equipment was $50,000 higher than the carrying value, and the fair value of the long-term debt was $4,000 lower than the carrying value. The separate condensed balance sheets of the two companies immediately after the acquisition (on 12/31) are as follows: Phoenix Sedona Cash $ 90,000 $ 60,000 Accounts receivable 130,000 25,000 Inventory 160,000 70,000 Plant and equipment (net)…
On December 31, 20X1, Par Inc reported total assets of $860,203, while Sub Corp reported total assets of $171,991. The fair values of Sub's assets and liabilities on the same date were $214421 and $49,313 respectively. On the morning of January 1, 20x2, Par agreed to acquire 100% of Sub for a total value of 86.25% of Sub for a total value of $286,678 by paying cash. On the consolidated balance sheet immediately after the acquisition, what should be the total assets reported by the combined entity under the fair-value-enterprise (FVE) method? a. $955,218 b. $979,099 Oc. $1,002,979 Od. $1,026.860 O e. $931,338 On January 1, 20X1, Par inc acquires 79.05% of Sub Corp for $153,469 in cash. Immediately before the acquisition, the book value of Sub's identifiable net assets was $104,016 with a fair value of $116,806, while the book value of Par's net assets was $204.623. What will be the amount of total shareholders' equity on the consolidated balance sheet immediately after the acquisition…

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