What amount should Draco Malfoy report as earnings from subsidiary in its 2020 income statement? а. Р12,000 b. P15,000 c. P16,000 d. P20,000 8. How much is the acquisition cost of investment? a. P120,000 b. P132,000 c. P150,000 d. P160,000 9. How much is the goodwill on combination? а. Р20,000 b. Р22,000 с. Р32,000 d. P40,000 10. How much is the non-controlling interest in the net assets of Ron Weasley on December 31, 2020?
What amount should Draco Malfoy report as earnings from subsidiary in its 2020 income statement? а. Р12,000 b. P15,000 c. P16,000 d. P20,000 8. How much is the acquisition cost of investment? a. P120,000 b. P132,000 c. P150,000 d. P160,000 9. How much is the goodwill on combination? а. Р20,000 b. Р22,000 с. Р32,000 d. P40,000 10. How much is the non-controlling interest in the net assets of Ron Weasley on December 31, 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Business Combination (EQUITY METHOD)
Transcribed Image Text:7, On January 3, 2020, Draco Malfoy Company acquired 80% of Ron Weasley Company's
outstanding shares. On that date, the carrying amounts of Ron Weasley's assets and
liabilities approximated their fair values. Non-controlling interest was measured using the
proportionate share method.
During 2020, Ron Weasley paid P5,000 cash dividends to its shareholders. Summarized
Statement of Financial Position for the two companies follows:
Transcribed Image Text:Draco Malfoy
Company (BV) Ron Weasley Company
12/31/2020
12/31/2020 01/01/2020
Investment in Ron Weasley (equity
method)
Other assets
132,000
138,000
270,000
115,000
115,000
100,000
100,000
Total
Ordinary share
Share premium
Retained eamings
50,000
80,250
139,750
270,000
20,000
44,000
51,000
20,000
44,000
36,000
100,000
Total
115,000
What amount should Draco Malfoy report as carnings from subsidiary in its 2020 income
statement?
а. Р12,000
b. P15,000
c. P16,000
d. P20,000
8. How much is the acquisition cost of investment?
a. P120,000
b. P132,000
c. P150,000
d. P160,000
9. How much is the goodwill on combination?
а. Р20,000
b. Р22,000
с. Р32,000
d. P40,000
10. How much is the non-controlling interest in the net assets of Ron Weasley on December
31, 2020?
a. P20,000
b. Р23,000
с. Р26,000
d. P32,000
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