Problem:On January 2, 2019, Xiao Company purchased an equipment withestimated useful life of 5 years. On January 4, 2021, Xiao sold theequipment to Ganyu Company and recorded the following entry in thebooks:Cash39,000Асс. Dep.16,000Equipment40,000Gain on sale15,000Ganyu Company holds 60% of the outstanding voting shares of XiaoCompany, Xiao reported net income of P45,000, and Ganyu reported netincome from its own operations of P85,000 for 2021. There is no changein the estimated life of equipment as a result of intercompany transfer.Q#1: The controlling interest in net income is:а. 14,000b. 12,000c. 52,000d. 18,000

Name: Problem:On January 2, 2019, Xiao Company purchased an equipment withe
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Description: Problem:On January 2, 2019, Xiao Company purchased an equipment withestimated useful life of 5 years. On January 4, 2021, Xiao sold theequipment to Ganyu Company and recorded the following entry in thebooks:Cash39,000Асс. Dep.16,000Equipment40,000Ga

The Controlling Interest means the share of Parent Company in Subsidiary's Asset/Income. Such…

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On January 2, 2019, Xiao Company purchased an equipment estimated useful life of 5 years. On January 4, 2021, Xiao solo equipment to Ganyu Company and recorded the following ent books: Cash 39,000 Асс. Dep. 16,000 Equipment 40,000

On January 2, 2019, Xiao Company purchased an equipment estimated useful life of 5 years. On January 4, 2021, Xiao solo equipment to Ganyu Company and recorded the following ent books: Cash 39,000 Асс. Dep. 16,000 Equipment 40,000

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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Problem: On January 2, 2019, Xiao Company purchased an equipment with estimated useful life of 5 years. On January 4, 2021, Xiao sold the equipment to Ganyu Company and recorded the following entry in the books: Cash 39,000 Аcс. Dep. 16,000 Equipment 40,000 Gain on sale 15,000 Ganyu Company holds 60% of the outstanding voting shares of Xiao Company, Xiao reported net income of P45,000, and Ganyu reported net income from its own operations of P85,000 for 2021. There is no change in the estimated life of equipment as a result of intercompany transfer. Q#1: In the working paper elimination entry for 2021, the depreciation expense will be a Credited for 5,000 b. Debited for 5,000 c. Credited for 13,000 d. Debited for 13,000
PROBLEM IL. On January 1, 2019, William Corp. (qualifies as SME) paid cash of P600,000 for the 80% of the outstanding shares of Kate Company. The carrying value of the assets and liabilities of Kate on January 1, 2019 follow: Accounts Receivable P90,000 Inventory 180,000 Plant & Equipment (net of Accumulated Depreciation of P220,000) 320,000 Goodwill 100,000 Liabilities 120,000 On January 1, 2019, Kate inventory had a fair value of P150,000 and plant & equipment (net) had a fair value of P380,000. Cost of arranging the combination are as follows: legal fees for combination, P30,000; finder's fee, P50,000; other miscellaneous direct costs, P20,000. Net income of William and Kate for 2019 amounts to P158,000 and P60,000, respectively. William received dividend of P18,000 from Kate during 2019. The PPE has original useful life of 10 years and was already held for 4 years as of date of acquisition. 1. On December 31, 2019, what is the consolidated net income? 2. How much is the carrying…
1. On 1 January 2019, Pitty Ltd purchased 30% of the shares in Annah Ltd for P700, 000. At this date, Annah Ltd's net assets stood at P1, 4m. At 31 December 2019, Annah Ltd has net assets of P1, 5m. Pitty Ltd sold goods worth P160, 000 to Annah Ltd at a margin of 25%. Half of the goods remained in inventory at the year-end. Calculate the value of the investment in associate as at 31 December 2019?
On January 1, 2021, P Corporation purchases from an unrelated person all the outstanding stock of S Corporation for $90,000. S’s balance sheet on the purchase date is as follows: Assets Basis Fair Market Value Cash $ 5,000 $ 5,000 Accounts Receivable 20,000 20,000 Inventory (LIFO) 20,000 40,000 Equipment (accumulated depreciation of $10,000) 30,000 45,000 Total Assets $75,000 $110,000 Liabilities Accounts payable $20,000 $ 20,000 Equity 55,000 90,000 Total liabilities and equity $75,000 $110,000 P properly elects § 338. S’s tax rate is 21 percent. a. What is the aggregate basis of S’s assets after this transaction? b. What is the basis for each individual asset?
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2) At December 31, 2021, The Comparative income statements of Polo Corporation and Solo Corporation show the following (in thousands): Sales Income from Solo Cost of goods sold Operating expenses Polo $3,200 384 1,800 800 Solo $1,300 400 400 Additional information 1. Polo Corporation acquired 80 percent of Solo for $1,600,000 on January 1, 2019, when Solo's Stockholders' equity at book value was $1,400,000. 2. The excess of the cost Polo's investment in Solo over book value acquired was allocated $60,000 to undervalued inventories that were sold in 2019, $80,000 to undervalued equipment with a four-year remaining useful life, and the remainder to goodwill. Required: Prepare a consolidated income statement for Polo Corporation and Subsidiary for the year ended December 31, 2021.
On January 1, 2020, William Corp. (qualifies as SME) paid cash of P600,000 for all the outstanding shares of Kate Company. The carrying value of the assets and liabilities of Kate on January 1, 2020 follow:Accounts Receivable P90,000Inventory 180,000Plant & Equipment (net of Accumulated Depreciation of P220,000) 320,000Goodwill 100,000Liabilities 120,000On January 1, 2020 Kate inventory had a fair value of P150,000 and plant & equipment (net) had a fair value of P380,000. Cost of arranging the combination are as follows: legal fees for combination, P30,000; finder’s fee, P50,000; other miscellaneous direct costs, P20,000.Net income of William and Kate for 2020 amounts to P158,000…
Huey Company acquires 100% of the stock of Solar Corporation on january 1, 2019, for $2.400,000 cash. As of that date Solor had the following account balances: Book Value Eair value Cash $630.000 $630,000 Accounts receivable 775.000 775,000 Inventory 350.000 400,000 Building-net (10 year life) 1,000,000 900,.000 Equipment-net (5 year life) 300.000 400.000 Land 600,000 900,000 Accounts Payable 125.000 125,000 Bonds Payable (Face amount S1,000,000. due 12/31/2023) 2.000.000 2,050,000 Common stock 500,000 Additional paid-in capital Retained earnings 250.000 780.000 in 2019 and 2020, Solar had net income of $250,000 and $240,000, respectively In addition, Solar paid dividends of $16,000 in both years, Inventory is assumed to be sold in 2019. Assume straight line amortization/ depreciation for assets and bonds payable. What amount of Solars single legat entity stockholders' equity will be included in the consolidated balance sheet at date of acquisition? Select one A $2.064.000 B $3,350,000…
Accounting Mathews Co. acquired all the common stock of Stewart Co. on January 1, 2020. As of that date, Stewart had the following trial balance: Debit Credit accounts payable 60,000 accounts receivable 50,000 additional paid in capital 60,000 buildings, net (20 yr life) 140,000 cash and short-term investments 70,000 common stock 300,000 equipment, net (8 yr life) 240,000 intangible assets (infinite life) 110,000 land 90,000 long-term liabilities ( matures 12/31/22) 180,000 Retained earnings 1/1/20 120,000 supplies 20,000 totals 720,000 720,000 During 2020, Stewart reported net income of $112,000 while paying dividends of $14,000. Assume that Mathews Co. acquired the common stock of Stewart Co. for $638,000 in cash. As of January 1, 2020, Stewart's land had a fair value of $112,000, its buildings were valued at $192,000, and its equipment was appraised at $245,000. Any excess of consideration transferred over fair value of…
On January 1, 2019, X Company purchased a 30% interest in Y Company for $250,000. Y reported net income of $100,000 for 2019 and declared and paid a dividend of $10,000. X using the Cost method. In its December 31, 2019, balance sheet what amount should X report as its investment in Y? Select one: a. 277,000 b. 340,000 c. 250,000 d. 223,000
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