Pete Inc. purchased 80% of Paul Co. for $270,000 when Paul's book value was $300,000. Paul has 50,000 shares outstanding and currently has a book value of $400,000. Assume Paul issues 30,000 additional shares of common stock solely to Pete Inc. for $12 per share. What is the adjusted book value of Paul Co. after the issuance of the shares? $608,000. O $720,000. $680,000. $760,000. $400,000

Pete Inc. purchased 80% of Paul Co. for $270,000 when Paul's book value was $300,000. Paul has 50,000 shares outstanding and currently has a book value of $400,000. Assume Paul issues 30,000 additional shares of common stock solely to Pete Inc. for $12 per share. What is the adjusted book value of Paul Co. after the issuance of the shares? $608,000. O $720,000. $680,000. $760,000. $400,000

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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Goodfellas obtained a 60% Bedfellow in the 100,000 $1 shares of Mist on 1 January 20X8, when the retained earnings of Mist were $850,000. Consideration comprised $250,000 cash, $400,000 payable on 1 January 20X9 and one share in Goodfellas for each two shares acquired. Goodfellas has a cost of capital of 8% and the market value of its shares on 1 January 20X8 was $2.30. Goodfellas measures non-controlling interest at fair value. The fair value of the non-controlling interest at 1 January 20X8 was estimated to be $400,000. What was the goodwill arising on acquisition Select one alternative: $169,000 $139,370 $119,370 $130,370
At the beginning of the current year, Remington Company acquired 200,000 ordinary shares of Universal Company for P9,000,000.At the time of purchase, Universal Company had outstanding 800,000 shares with carrying amount of P36,000,000.The following events took place during the current year:- Universal Company reported net income of P1,800,000 for the current year- Remingtong Company received from Universal Company a dividend of P3.00 per ordinary share or P600,000.- The market value of Universal Company share had temporarily declined to P40. Assuming the investment is a FA@FVPL. What is the carrying amount of the investment at year-end? a.) 9,000,000 b.) 8,000,000 c.) 9,300,000 d.) 9,450,000
The following are two independent situations.Situation 1Metlock Cosmetics acquired 10% of the 191,000 shares of common stock of Martinez Fashion at a total cost of $14 per share on March 18, 2020. On June 30, Martinez declared and paid $80,900 cash dividend to all stockholders. On December 31, Martinez reported net income of $121,000 for the year. At December 31, the market price of Martinez Fashion was $15 per share.Situation 2Bonita, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles’s 29,700 outstanding shares of common stock at a total cost of $10 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $33,000 to all stockholders. On December 31, Seles reported a net income of $79,200 for the year.Prepare all necessary journal entries in 2020 for both situations. (
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On January 1, 2021 ABC purchased 80% of the outstanding shares of DEF at a cost of $960,000. On that date, DEF had $600,000 worth of outstanding shares and $60,000 worth of accumulated profits. For 2021, ABC had income of $336,000 from its own operations and paid dividends of $180,000. For 2021, DEF reported income of $64,000 and paid dividends of $36,000. All of the assets and liabilities of DEF have book values equal to their market value. On January 1, 2021, ABC sold equipment to DEF for $120,000. The book value of the equipment on that was $144,000. The loss of $24,000 is reflected in the net income of indicated above. The equipment is expected to have a useful life of five years from the date of the sale. In the December 31, 2021 consolidated statement of financial position, the non- controlling interest in net assets of Subsidiary should be presented at O 284,400 O 240,000 O 245,600 O 255,600
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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 January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits. For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value. On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date. For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company. What is the Non-controlling Interest in Net Assets of Subsidiary as of December 31, 20x2?
At the start of the current year, Violet Company held 30% of ABC Company's 150,000 outstanding shares and 2% of DEF Company's 500,000 outstanding shares. During the year, Violet received a 25,000 cash dividend from ABC and a 5% share dividend when the stock of ABC was selling at 40 per share. DEF declared 15 per share dividend during the year but subsequently issued 500 shares to violet in lieu of the cash dividends. At the end of the year, Violet received 50,000 as liquidating dividends from DEF Company. How much will Violet report as dividend income for the current year?
On June 1, Axie Corporation issued 8,000 shares of its P100 par ordinary share capital to BEAST for a building. The shares were actively traded in the stock exchange at P150 per share. The BEAST's last property tax bill, the land had an assessed value of P1,640,000. What is the increase in the share premium account of Axie Company as a result of the foregoing issuance of shares?
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