On October 31, 2020, Dylan Company declared its non-current asset (land) as a dividend with a carrying value of P2,600,000 and has a current fair value of P2,405,000. On December 31, 2020, the non-current asset has a fair value of P2,730,000. The non-current asset was distributed on March 31, 2021 when its fair value was P2,925,000. a. What amount should be charged to retained earnings at the time the dividend was declared? b. What amount of property dividends payable should the company disclose in their December 31, 2020 statement of financial position? c. What amount of asset held for disposal should the company disclose in their December 31, 2020 statement of financial position?

On October 31, 2020, Dylan Company declared its non-current asset (land) as a dividend with a carrying value of P2,600,000 and has a current fair value of P2,405,000. On December 31, 2020, the non-current asset has a fair value of P2,730,000. The non-current asset was distributed on March 31, 2021 when its fair value was P2,925,000. a. What amount should be charged to retained earnings at the time the dividend was declared? b. What amount of property dividends payable should the company disclose in their December 31, 2020 statement of financial position? c. What amount of asset held for disposal should the company disclose in their December 31, 2020 statement of financial position?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: At the beginning of 2020, Silver Corporation has a $95,000 capital loss carryforward from 2019.…

A: Section 1231 propertyExamples of section 1231 property that are depreciable business assets include…

Q: Did the PT Papa acquisition transaction generate goodwill? If so, what amount of goodwill will be…

A: Acquisition can be defined as the take over of the entire business by another business who has due…

Q: make a journal entry recorded by PT Astina regarding the land in 2019. b. Describe how the…

Q: Suppose a firm has the following taxable income as shown below. How much loss wor to be carried…

A: As per Internal Revenue Service (IRS), Net Operating Loss (NOL) can be set off against the future…

Q: During 2021, Carla Vista Company purchased the net assets of Martinez Corporation for $219560O. On…

A: Gain on bargain purchase = Fair value of net assets acquired - Purchase consideration for business…

Q: Oriole Company's balance sheet at December 31, 2026 reports assets of $1054000 and liabilities of…

A: In case one company overtake the assets and liabilities of another company, then accounting for…

Q: furnit r equi

A: Introduction Depreciation expense can be defined as a non-cash expenditure which represents the…

Q: Renata Corporation has a gain of $ § 1245 recapture X of which $ X is treated as ordinary income due…

A: First we need to determine the adjusted basis of the equipment using the formula below:

Q: PT Adista owns land that was purchased in cash on January 2, 2018 at a cost of IDR 1,000,000,000.…

A: There are two methods for subsequent accounting of the fixed assets; which are, Cost model and the…

Q: Rooky acquired Bamboo on December 31,2020 for P500,000. Bamboo's Liabilities and Capital at that…

A: Goodwill:- It is an intangible asset which one shows in the Balance sheet of the company. These…

Q: Blue sky company’s balance sheet dated 12/31/2020 reports 6 million And assets in 2.4 million in…

A: Whenever the acquisition is done by the company then there are assets and liability that is to be…

Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

On October 31, 2020, Dylan Company declared its non-current asset (land) as a dividend with a carrying value of
P2,600,000 and has a current fair value of P2,405,000. On December 31, 2020, the non-current asset has a fair value of
P2,730,000. The non-current asset was distributed on March 31, 2021 when its fair value was P2,925,000.
a. What amount should be charged to retained earnings at the time the dividend was declared?
b. What amount of property dividends payable should the company disclose in their December 31, 2020 statement of
financial position?
c. What amount of asset held for disposal should the company disclose in their December 31, 2020 statement of financial
position?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Assume that ABC, Inc, acquires a competitor's assets on June 10, 2020. The purchase price was $150,000. Of that amount, $125,000 is allocated to tangible assets and $25,000 is allocated to goodwill (a §197 intangible asset). What is ABC, Inc. amortization deduction for 2020? (Round final answer to the nearest whole number.) a) $25,000. b) $1,667. c) $972. d) $833. e) None of the above.
At the beginning of 2019, PT XYZ purchased an asset for Rp600.000 with an estimated useful life of 5 years and an estimated residual value of Rp50.000. For financial reporting purposes the asset is being depreciated using the straight-line method; for tax purposes the double-declining-balance method is being used. ABC’s tax rate is 40% for 2019 and all future years. At the end of 2019, which of the following deferred tax accounts and balances is reported on ABC’s statement of financial position?
On January 1, 2020, Azure Corporation purchased Sparrow Corporation for $20 million. Of the $20 million purchase price, $2 million was allocated to goodwill. What is Azure’s amortization deduction related to the goodwill for 2020? Round your answer to the nearest whole dollar.
49
Renata Corporation purchased equipment in 2019 for $180,000 and has taken $83,000 of regular MACRS depreciation. Renata Corporation sells the equipment in 2021 for $110,000. What is the amount and character of Renata's gain or loss? Renata Corporation has a gain of $ of which $ is treated as ordinary income due to
Company A purchased company B for $50,000,000. Company B had net assets of $30,000,000, therefore $20,000,000 was paid in excess of the fair value of the net assets. What does this $20,000,000 premium paid by company A represent? In other words, what is this called?