Pino Corporation owned a 90% interest in a subsidiary, Sino Company, which was accounted for by the equity method, During 2020, Pino share in Sino net income $243,000. Sino declared and paid a $80,000 dividend during Year 2020. There were no differences between the current fair values and carrying amounts of Sino's identifiable net assets on the date of the business combination, and there was no goodwill in the business combination. the consolidated

Pino Corporation owned a 90% interest in a subsidiary, Sino Company, which was accounted for by the equity method, During 2020, Pino share in Sino net income $243,000. Sino declared and paid a $80,000 dividend during Year 2020. There were no differences between the current fair values and carrying amounts of Sino's identifiable net assets on the date of the business combination, and there was no goodwill in the business combination. the consolidated

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

Sub Corporation is a wholly owned subsidiary of Parent Corporation. Sub Corp has three assets: Cash $20,000; Inventory FMV $200,000, AB $140,000; Land FMV $180,000, AB $210,000. Sub adopts a formal plan of liquidation and immediately thereafter distributes its assets to Parent. Parent's adjusted basis in its Sub Corporation stock was equal to $285,000. Parent had acquired Sub Corporation six years prior to the liquidation. What are the tax consequences of this liquidation to Parent Corp and Sub Corp? Sub Corporation is owned 95% by Parent Corporation and 5% by Brian an unrelated person. Sub Corp has three assets: Equipment FMV $20,000, AB $6,000; Inventory FMV $200,000, AB $140,000; Land FMV $180,000, AB $210,000. Sub adopts a formal plan of liquidation and immediately thereafter distributes its assets to Parent. Parent's adjusted basis in its Sub Corporation stock was equal to $285,000 and Brian's adjusted basis in his Sub stock was equal to $13,500. Parent Corp and Brian had acquired…
Goku Corporation is an 80% owns subsidiary of Vegeta Corporation. In 2018, Goku sold land net cost of P30,000 to Vegeta for P50,000. Vegeta held the land for 8 years before selling it in 2019 to Frieza Company, an unrelated entity, for P110,000. The consolidated income statement of Vegeta and its subsidiary in 2019, Goku, will show a gain on the sale of land of: 80,000 60,000 32,000 48,000
V Corp. owns 70% of F Corp’s ordinary shares. On August 1, 2020, F Corp. sold a machine to V Corp. for P290,000. The carrying amount of the machine is P170,000 and has a remaining life of 8 years. Due to this intercompany transaction, compute the net adjustment (increase/decrease) in the consolidated net income attributable to the non-controlling interest for 2020. * A. Answer not given B. P1,875 increase C. P6,250 increase D. P34,125 decrease E. P43,750 decrease
Illustration 2. Non-Controlling InterestOn January 1, 2021, Inahan Co. acquired 75% of the voting shares of Bunso, Inc. As of this date, the carrying amounts and fair values of the assets and liabilities of Bunso acquired by Inahan are shown below: On the negotiation for the business combination, Inahan Co. incurred the following transaction costs: P65,000.00 for legal fees; P 125,000.00 for due diligence costs and P 60,000.00 for the general administrative costs of maintaining an internal acquisitions department. Case 1: Non-Controlling Interest measured at fair valueInahan Co. elects the option to measure the non-controlling interest at fair value. The independent consultant engaged by Inahan Co. determined that the fair value of the 25% non-controlling interest in Bunso, Inc. is P600,000.00. Inahan paid P 1,500,000.00 cash and P750,000.00 land with fair value of P 1,000,000.00 as consideration for the 75% interest in Bunso, Inc. 1.How much is the transaction costs incurred during…
Windell Inc. acquired 85% of the outstanding voting shares of Ralph Corp forP1,500,000. On the acquisition date, Ralph's identifiable assets and liabilities havefair values of P6,000,000 and P4,700,000, respectively. Windell opts to measure thenon-controlling at a fair value of P300,000. How much is the goodwill (gain onbargain purchase) as a result of the business combination?
Kent Ltd owns all the share capital of Lodh Ltd. That is, Lodh Ltd is a wholly own subsidiary of Kent Ltd. Required: In relation to the following intra-group transactions, prepare the consolidation worksheet adjusting entries for the preparation of consolidated financial statements as of 30 June 2020. All parts are independent unless specified. Assume an income tax rate of 30% and that all income on sale of assets is taxable and expenses are deductible. a. On 1 January 2020, Kent Ltd sold inventory costing $10,000 to Lodh Ltd at a transfer (sale) price $16,000. Lodh Ltd sold half of this inventory to an external party for $10,000 (i.e., half of the inventory is remained with Lodh Ltd at the end of the year). b. During March 2018, Lodh Ltd paid a $5,500 interim dividend. c. Kent Ltd rented a spare warehouse to Lodh Ltd. The total charge for the rental was $6,000. Lodh Ltd paid…
Fred Corporation is a 90% owned subsidiary of John Corporation acquired several years ago at book value (which is equal to fair value). For the years 2020 and 2021, John and Fred report the following: John's separate income Fred's net income 2020. 2021 P300,000 P400,000 80,000 60,000 The only intercompany transaction between John and Fred during 2020 and 2021 was the January 8, 2020 sale of land. The land had a book value of P20,000 and was sold intercompany for P30,000, its appraised value at the time of sale. 1.)Assuming that it was Fred who sold the land to John (Upstream sale) on 2020 and subsequently sold it to third party on 2021, how much is the non-controlling interest in net income of subsidiary for 2021? a. P7,000 b. P6,000 c. P5,000 d. P6,100
Parent Ltd (Parent) controls a subsidiary Sub Ltd (Sub), in which it owns 70 per cent of the issued capital since 30 June 20X3. The following transactions are relevant for the preparation of the consolidated financial statements for the financial year ending 30 June 20X7. Transaction 1: During the financial year ending 30 June 20X4, Sub sold an item of plant to Parent at a loss. Parent is still using the plant at 30 June 20X7. Transaction 2: Sub paid an interim dividend in August 20X5. Parent is exempt from income tax on dividends received from the subsidiary. Transaction 3: During the financial year ending 30 June 20X7, Parent sold inventory to Sub for a price greater than its cost to Parent. One-third of this inventory is still on hand at 30 June 20X7. Transaction 4: On 1 November 20X6, Parent borrowed $50 000 from Sub at an interest rate of 10 per cent per annum. The interest on the loan is payable every six months starting 1 May 20X7. The loan is still outstanding at 30 June…
1.Fred Corporation is a 90% owned subsidiary of John Corporation acquired several years ago at book value (which is equal to fair value). For the years 2020 and 2021, John and Fred report the following: John's separate income Fred's net income 2020. 2021 P300,000 P400,000 80,000 60,000 The only intercompany transaction between John and Fred during 2020 and 2021 was the January 8, 2020 sale of land. The land had a book value of P20,000 and was sold intercompany for P30,000, its appraised value at the time of sale. a. The Consolidated net income for 2020 and 2021: 2020 2021 a.P372,000 P460,000 b.P370,000 P460,000 c.P362,000 P454,000 d.P380,000 P460,000
Highpoint owns a 95 percent majority voting interest in Middlebury. In turn, Middlebury owns an 80 percent majority voting interest in Lowton. In the current year, each firm reports the following income and dividends. Separate Company income figures do not include any investment or dividend income.In addition, in computing its income on a full accrual basis, Middlebury's acquisition of Lowton necessitates excess acquisition-date fair value over book value amortizations of $25,000 per year. Similarly, Highpoint's acquisition of Middlebury requires $20,000 of excess fair-value amortizations. Required Prepare an Excel spreadsheet that computes the following: 1. Middlebury's net income including its equity in Lowton earnings. 2. Highpoint's net income including its equity in Middlebury's total earnings. 3. Total entity net income for the three companies. 4. Net income attributable to the noncontrolling interests. 5. Difference between these elements: • Highpoint's net income. • Total…