None The following information relates to questions 1-6On 1 July 2020, Cindy Ltd acquired all the issued capital of Vida Ltd for a cash payment of $66,000 when the equity of Vida Ltd was:Share capital$31,000Retained earningsRevaluation surplus$5,000$8,000At 1 July 2020, all assets of Vida Ltd were fairly valued. Directors determined that goodwill would be impaired by 10% in 2021, 2022 and 2023 on itsoriginal value. Assume that there are no intra-group transactions or deferred tax consequences from 1 July 2020 to 30 June 2023. The financialstatements as at 30 June 2023 are provided in question 3 in the partially-completed consolidation worksheet. Tax rate is 30%. Reporting date is 30 June.Cindy Ltd has investment in other entities.

To address the situation portrayed, we want to figure out the effect of the obtaining of Vide Ltd by…

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Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

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On 1 July 2015, Ava Ltd acquired all the issued capital of Tracy Ltd for a cash payment of $55000 when the equity of Tracy Ltd was: Share Capital. $26000Retained Earnings $5000Revaluation surplus $4000 At 1 July 2015, all assets of Tracy Ltd were fairly valued. Directors determined that goodwill would be impaired by 10% in 2016, 2017 and 2018. Assume that there are no intra-group transactions or deferred tax consequences from 1 July 2015 to 30 June 2018. Tax rate is 30%. Reporting date is 30 June. Ava has investment in other entities. (a) Prepare an acquisition analysis and determine the amount of goodwill or gain on bargain purchase at acquisition. (Show all workings) (b) Prepare the acquisition elimination journal entries for consolidation as at 30 June 2018. (Number consolidation journal entries by 1, 2, 3....etc; Narration are required) (Show all workings out)
Assuming in 2021, the investee earned a net income of P3 million, how much must be recognized by Angelic Company as its share in the 2021 net income of the investee?
Sydney Ltd purchased 20% of the shares in Melbourne Ltd on 1 July 2019 for $250,000. During the year Melbourne Ltd announced a netprofit of $60,000 and declared and paid dividends of $20,000.If Sydney Ltd accounted for the investment in Melbourne Ltd using the cost method how much revenue would Sydney Ltd have recogniseddue to its investment in Melbourne Ltd for the year ending 30 June 2020.
On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltd issued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of Eldorado Ltd. The costs of issuing the shares by Quick Buck Ltd cost $1,600. At this date the statement of financial position of Eldorado Ltd was as follows: Carrying amount Fair value Machinery $40,000 S67,000 Fixtures & fittings 60,000 68,000 Vehicles 35,000 35,000 Current assets 10,000 12,000 Current liabilities (16,000) (18,000) Total net assets S129,000 Share capital (80,000 shares at $1.00 per share) $80,000 General reserve 20,000 Retained earnings 29,000 Total equity $129,000 Required: Prepare the journal entries in the records of Quick Buck Ltd at 1 July 2019 for the acquisition.
On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltd issued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of Eldorado Ltd. The costs of issuing the shares by Quick Buck Ltd cost $1,600. At this date the statement of financial position of Eldorado Ltd was as follows: Carrying amount Fair value Machinery $ 40,000 $ 67,000 Fixtures & fittings 60,0000 68,000 Vehicles 35,000 35,000 Current assets 10,000 12,000 Current liabilities (16,000) (18,000) Total net assets $ 129,000 Share capital (80,000 shares at $1.00 per share) $ 80,000 General reserve 20,000 Retained earnings 29,000 Total equity 129,000 Required:Prepare the journal entries in the records of Quick Buck Ltd at 1 July 2019 for the acquisition.
On 30 June 2020 Pink Ltd acquired all assets (except for cash) and assumed all liabilities (except for debentures) of Purple Ltd. At this date, the carrying amounts of assets and liabilities of Purple Ltd were at fair value and consisted of: $15,000 32,000 40,000 Cash Accounts payable $9,000 Accounts receivable Debentures (10%) Share capital ($2 shares) Retained earnings 40,000 Inventory 110,000 Shares in listed companies 90,000 48,000 Motor Vehicle 45,000 Accumulated depreciation (15,000) In exchange for these net assets, Pink Ltd agreed to: issue two (2) Pink Ltd shares for every five (5) shares in Purple Ltd. On 30 June 2020 Pink Ltd shares were valued at $5.50 provide sufficient additional cash in order for Purple Ltd to pay out the debentures (including interest) and liquidation costs of $3,500. Required: Prepare an acquisition analysis for Pink Ltd's acquisition of Purple Ltd. wwww
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How much should be reported in the 2019 Profit or Loss?
Blush Company has the ability to exercise significant when the fair value of net assets was P20,000,000. outstanding ordinary shares of an investee for P4,000,000 On July 1, 2020 Blush Company purchased 20% of the influence over the operating and financial policies of the investee. The following data concerning the investee are available: 12 months ended December 31, 2020 December 31, 2020 6 months ended Net income Dividend declared and paid 3,000,000 1,900,000 1,600,000 1,000,000 in the income statement for the year ended December 31, o020, what amount of income should be reported from the investment?
On 1 July 2018 Cool Ltd purchased an 80% controlling interest in Sunny Ltd for a consideration of $350,000. On that date the pre-control equity of Sunny consisted of: Paid up capital $200 000 Retained profits $150 000 General reserve $ 50 000 Total equity $400 000 The net assets of Sunny Ltd were recorded at fair values. Relevant financial data for the two companies, for the year ending 30 June 2020, is provided on the worksheet below. Further information: During May 2019 Sunny Ltd sold inventory to Cool Ltd at a profit of $8,000. This inventory was sold by Cool Ltd to external parties during the month of July 2019. On 30 June 2020 Cool Ltd purchased from Sunny Ltd an item of equipment for $40,000. The equipment has a cost of $90,000 and a carrying amount of $28,000. The equipment has a remaining useful life of 4 years and a residual value of zero. Consolidation worksheet as at 30 June 2020 Cool Sunny Sum Eliminations…
Marie Bhd acquired 80% of Donny Bhd ordinary share capital on 1 January 2019. As at 31 December 2019, extracts from their individual statements of financial position showed: Accounts Marie Bhd (RM) Donny Bhd (RM) Current assets: Receivables 105,000 40,000 Current liabilities: Payables 90,000 21,000 As a result of trading during the year, Marie Bhd’s receivables balance included an amount due from Donny Bhd of RM5,000.Required:Explain the amount to be shown as the consolidated figure for receivables andpayables. Please show your calculation.

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