On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in

On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in

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

Ruiz Company puchased 30 per cent of Sim Company’s outstanding common stock for $3,000,000 and uses the equity method of accounting. Sim Company reported net income of $ 640,000 for 2018. On 2018 December 31, Sim Company paid a cash dividend of $200,000. In 2019, Sim Company incurred a net loss of $ 65,000. Prepare entries to reflect these events on Ruiz Company’s books.
On January 1, 2015, Fisher Corporation paid $2,290,000 for 35 percent of the outstanding voting stock of Steel, Inc., and appropriately applies the equity method for its investment.Any excess of cost over Steel’s book value was attributed to goodwill. During 2015, Steel reports $720,000 in net income and a $100,000 other comprehensive income loss. Steel also declares and pays $20,000 in dividends. What amount should Fisher report as its Investment in Steel on its December 31, 2015, balance sheet? What amount should Fisher report as Equity in Earnings of Steel on its 2015 income statement?
Hanson Corporation purchases a 10% interest in Novic Company on January 1, 2016, and an additional 15% interest on January 1, 2018. These investments cost Hanson Corporation $80,000 and $110,000, respectively. The following stockholders’ equities of Novic Company are available: December 31, 2015 December 31, 2017 Common stock ($10 par). . . . . . . . . .$500,000 $500,000 Retained earnings . . . . . . . . . . . . . . . . . 250,000 300,000 Total equity . . . . . . . . . . . . . . . . . . . . . . $750,000 $800,000 Any excess of cost over book value on the original investment is attributed to goodwill. Any excess on the second purchase is attributable to equipment with a 4-year life. Novic Company has income of $30,000, $30,000, and $40,000 for 2016, 2017, and 2018, respectively. Novic pays dividends of $0.20 per share in 2017 and 2018. Ignore income tax considerations, and assume…
Question: On January 1, 2011, Anderson Company purchased 40% of the voting common stock of Barney Company for $2,000,000, which approximated book value. During 2011, Barney paid dividends of $30,000 and reported a net loss of $70,000. What amount of equity income would Anderson recognize in 2011 from its ownership interest in Barney?
10 On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? Group of answer choices No entry P40,000 Dr. P1,035,000 Cr. P1,060,000 Cr.
Please help me
On 1 February 2011 PETA acquired 35% of the equity shares of AVO, its only associate, for $20,000,000 in cash. The post-tax profit of AVO for the year to 30 September 2011 was $6,000,000. Profits accrued evenly throughout the year. AVO made a dividend payment of $2,000,000 on 1 September 2011. At 30 September 2011, PETA decided that an impairment loss of $1,000,000 should be recognised on its investment in AVO. In PETA's separate financial statement, PETA did not recognize any impairment loss related to its investment in AVO. What amount will be shown as 'investment in associate' in the statement of financial position of PETA as at 30 September 2011? PLEASE EXPLAIN THE ANSWER. A) $20,350,000 B) $21,050,000 C) $21,750,000 D) $19,700,000 E) None of the above
Grat Company acquired 30% of Suth Company’s voting share capital for P2,000,000 on January 1, 2017. Grat’s 30% interest in Suth gave Grat the ability to exercise significant influence over Suth’s operating and financial policies. During2017, Suth earned P800,000 and paid cash dividends of P500,000. Suth reported earnings of P1,000,000 for the six months ended June 30, 2018 and P2,000,000 for the year ended December 31, 2018. On July 1, 2018, Grat sold half of the investment in Suth for P1,500,000 cash. On such date, the investment is measured at fair value through other comprehensive income. The fair value of the retained investment is P1,600,000 on July 1, 2018 and P1,800,000 on December 31, 2018.What amount should be recognized as investment income for 2017 as a result of the investment? 150,000 240,000 500,000 800,000
BuyCo, Inc. holds 25 percent of the outstanding shares of Marqueen Company and appropriately applies the equity method of accounting. Excess cost amortization (related to a patent) associated with this investment amounts to $10,000 per year. For 2017, Marqueen reported earnings of $100,000 and declares cash dividends of $30,000. During that year, Marqueen acquired inventory for $50,000, which it then sold to BuyCo for $80,000. At the end of 2017, BuyCo continued to hold merchandise with a transfer price of $32,000.a. What Equity in Investee Income should BuyCo report for 2017?b. How will the intra-entity transfer affect BuyCo’s reporting in 2018?c. If BuyCo had sold the inventory to Marqueen, how would the answers to (a) and (b) have changed?
On 1 January 2017, Al Yousef Group acquired 30% of the outstanding voting shares of Saleh Enterprises for OMR 2,000,000 in cash, a price that was equal to 30% of Saleh's net assets. The investment gave Al Yousef significant influence over Saleh. During the year ending December 31, 2017, Saleh had Net Income of OMR 200,000 and paid dividends of OMR 40,000. For the year ending December 31, 2018, Saleh had a net income of OMR 250,000, and paid dividends of OMR 50,000. For the year ending December 31, 2019, Saleh's business started to have some operational issues that they had a Net Loss of OMR 25,000, however they still managed to pay dividends of OMR 10,000. For the year ending December 31, 2020, because of COVID-19, Saleh had a Net Loss of OMR 50,000 and no dividends have been paid for 2020. Please answer the following questions pertaining to Al Yousef Company: Questions No. 32, 33 and 34 What will be the journal entry to record their share in Saleh's dividends on December 31, 2017?…
Parent acquires 80% of Sub for $170,000 on December 31, 2014. In 2015 Sub has net income of $140,000 and paid dividends of $70.000. Amortization of excess fair value over book value for the year was $43,750. What is the Investment in Sub account balance as of December 31, 2015.
On January 1, 2017, Rama Corporation paid $150,000 for 30% of Samer Company's stock. Rama reported a net income of $25,000 in 2017, paid out $10,000 in dividends, and the annual amortization was $1,000 due to the undervaluation of the buildings (F.V> B.V). Rama uses the equity method. What is the balance of investment in Samer Company that will be reported on December 31, 2017? a. $157,500 O b. $153,500 O c. $150,000 d. $153,400