On January 1, Year 4, Goodkey Co. acquired all of the common shares of Jingya. The condensed income statements for the two companies for January, Year 5, were as follows: Sales Gain on sale of equipment Other income Depreciation expense Other expenses Income tax expense Net income Goodkey $10,100,000 810,000 10,910,000 460,000 6,610,000 1,983,000 9,053,000 $ 1,857,000 Jingya $ 6,010,000 242,000 51,000 6,303,000 181,000 4,310,000 543,600 5,034,600 $ 1,268,400 The following transactions occurred in January, Year 5, and are properly reflected in the income statements above: • On January 1, Year 5, Jingya sold equipment to Goodkey for $1,010,000 and reported a gain of $242,000. On this date, the equipment had a remaining useful life of four years. • On January 31, Year 5, Jingya paid a dividend of $610,000. Goodkey uses the cost method to account for its investment in Jingya. Both companies pay income tax at the rate of 40%.

On January 1, Year 4, Goodkey Co. acquired all of the common shares of Jingya. The condensed income statements for the two companies for January, Year 5, were as follows: Sales Gain on sale of equipment Other income Depreciation expense Other expenses Income tax expense Net income Goodkey $10,100,000 810,000 10,910,000 460,000 6,610,000 1,983,000 9,053,000 $ 1,857,000 Jingya $ 6,010,000 242,000 51,000 6,303,000 181,000 4,310,000 543,600 5,034,600 $ 1,268,400 The following transactions occurred in January, Year 5, and are properly reflected in the income statements above: • On January 1, Year 5, Jingya sold equipment to Goodkey for $1,010,000 and reported a gain of $242,000. On this date, the equipment had a remaining useful life of four years. • On January 31, Year 5, Jingya paid a dividend of $610,000. Goodkey uses the cost method to account for its investment in Jingya. Both companies pay income tax at the rate of 40%.

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

3. Set out below are the draft income statements of P and its subsidiary S for the year ended 31 December 20X7. On the 1 January 20X6 P purchased 75% of the ordinary shares in S. Revenue Cost of sales and expenses Gross profit Operating expenses Profit from operations Finance costs Profit before taxation Tax Profit for the year P $000 300 (180) 120 (47) 73 73 (25) 48 S $000 150 (70) 80 P values non-controlling interest using the fair value method. (23) 57 (2) 55 (16) 39 During the year S sold goods to P for $20,000, making a mark up of one third. Only 20% of these goods were sold before the end of the year, the rest were still in inventory. Prepare the consolidated income statement for the year ended 31 December 20X7
Premier Company owns 90 percent of the voting shares of Stanton, Inc. Premier reports sales of $480,000 during the current year and Stanton reports $264,000. Stanton sold inventory costing $28,800 to Premier (upstream) during the year for $57,600. Of this amount, 25 percent is still in ending inventory at year-end. Total receivables on the consolidated balance sheet were $81,800 at the first of the year and $119,100 at year-end. No intra-entity debt existed at the beginning or ending of the year. Using the direct method, what is the consolidated amount of cash collected by the business combination from its customers?a. $706,700b. $649,100c. $686,400d. $744,000
On the 1/01/x3, J Group acquired 2 025 000 of the 4 500 000 ordinary R1 shares in Entity PA for R5 695 000. At acquisition, PA had retained earnings of R1 400 000. When preparing the J Group’s consolidated financial statements for the year end date of 31/12/x3, accountants at the group entity are working with the following information: In the x3 financial year, Entity PA made a profit after tax of R 1 230 000; In the x3 financial year, PA paid a dividend totaling R45 000 to its shareholders; At the end of the x3 financial year, the group’s investment in PA is found to have impaired by R94 000. Based on this information, calculate the group’s investment in associate figure, in its consolidated financial statements dated 31/12/x3.
On January 1 Kwun Corporation purchased a 20% equity in Connors Corporation for $180,000. At December 31 Connors declared and paid a $60,000 cash dividend and reported net income of $200,000. Instructions (a) Journalize the transactions.
On January 1, year 1, ABC Company purchased 80% of the stock of XYZ for P4,000,000 cash. Prior to the acquisition, XYZ had 100,000 shares of stock outstanding. On the date of acquisition, XYZ's stock had fair value of P52 per share. During the year, XYZ reported P280,000 in net income and paid dividends of P50,000. What is the balance in the noncontrolling interest account on ABC's balance sheet on December 31, year 1?
During the current year, Elements Corporation has the following transactions: Income from operations $450,000 Expenses from operations 470,000 Dividends received fromR Corporation * 150,000 *Elements owns 10% of the stock in R Corporation. How much is Element Corporation’s taxable income (loss) for the year.
Nasty is a wholly owned subsidiary of Ugly. Inventories in their individual statements of financial position at the year end are shown as: Ugly $40,000 Nasty $20,000 Sales by Ugly to Nasty during the year were invoiced at $15,000 which included a profit by Ugly of 25% on cost. Two thirds of these goods were included in inventories at the year end. At what value should inventories appear in the consolidated statement of financial position?
On January 1, 20X2, Plend Corporation acquired all of Stork Corporation's assets and liabilities by issuing shares of its common stock. Partial balance sheet data for the companies prior to the business combination and immediately following the combination are as follows: Plend Corporation Stork Corporation Combined Entity Book Value Book Value Assets Cash $ 52,000 $ 22,000 $ 74,000 Accounts Receivable 72,000 42,000 112,000 Inventory 62,000 47,000 120,000 Buildings and Equipment (net) 312,000 122,000 454,000 Goodwill ? Total Assets $ 498,000 $ 233,000 $ ? Liabilities and Equities Accounts Payable $ 44,000 $ 26,000 $ 70,000 Bonds Payable 162,000 82,000 244,000 Bond Premium 6,000 6,000 Common Stock, $5 par 112,000 52,000 139,500 Additional Paid-In Capital 77,000 40,000 335,500 Retained Earnings 97,000 33,000 ? Total Liabilities and Equities $ 498,000 $ 233,000 $ ? 1.What was the total market value of the shares issued by…
During the current year, Swallow Corporation, a calendar year C corporation, has the following transactions: Income from operations $660,000 Expenses from operations 760,000 Dividends received from Brown Corporation 240,000 Click here to view the dividend received deduction table. Question Content Area a. Swallow Corporation owns 12% of Brown Corporation's stock. How much is Swallow's taxable income or NOL for the year? Swallow's taxable income after deducting the dividends received deduction is $fill in the blank fd6fd0f8303e049_2 . Feedback Area Feedback The purpose of the dividends received deduction is to mitigate multiple taxation of corporate income. Without the deduction, income paid to a corporation in the form of a dividend would be taxed to the recipient corporation with no corresponding deduction to the distributing corporation. Later, when the recipient corporation paid the income to its shareholders, the income would again be subject to taxation with no corresponding…
Acker Company bought 100% of Howell Company on 1/1/X1 for $1,440,000 and began applying the equity method. The book value of Howell's equity on that date was $1,440,000. In year X1, Howell reported net income of $100,000 and paid $40,000 in dividends. During year X1, Howell sold 1,000 units of inventory to Acker for $20,000 that had cost $10,000. On 12/31/X1, 400 of the units remained in Acker's inventory. How much investment income should Acker report in year X1
On the 1/01/x3, J Group acquired 2 025 000 of the 4 500 000 ordinary R1 shares in Entity PA for R5 695 000. At acquisition, PA had retained earnings of R1 400 000. When preparing the J Group's consolidated financial statements for the year end date of 31/12/x3, accountants at the group entity are working with the following information: In the x3 financial year, Entity PA made a profit after tax of R 1 230 000; In the x3 financial year, PA paid a dividend totaling R45 000 to its shareholders; At the end of the x3 financial year, the group's investment in PA is found to have impaired by R94 000. Based on this information, calculate the group's investment in associate figure, in its consolidated financial statements dated 31/12/x3.
On the 1/01/x3, J Group acquired 2 025 000 of the 4 500 000 ordinary R1 shares in Entity PA for R5 695 000. At acquisition, PA had retained earnings of R1 400 000. When preparing the J Group's consolidated financial statements for the year end date of 31/12/x3, accountants at the group entity are working with the following information: In the x3 financial year, Entity PA made a profit after tax of R 1 230 000; In the x3 financial year, PA paid a dividend totaling R45 000 to its shareholders; At the end of the x3 financial year, the group's investment in PA is found to have impaired by R94 000. Based on this information, calculate the group's investment in associate figure, in its consolidated financial statements dated 31/12/x3.