3. What is the carrying amount of the investment inof the outstanding ordinary shares of Free Company forP5,000,000 cash. Cyber Company accounts for this investmentAt the date of acquisition, Free Company's net assets had aexcess of carrying amount. The land was sold during theFree Company owned land with a fair value of P1,000,000 inAt the beginning of current year, Cyber Company bought 30%Problem 17-16 (IAA)by the equity method.carrying amount of P12,000,000.acurrent year.The remaining difference between the purchase price andihe carrying amount of the underlying equity cannot beattributed to any identifiable tangible or intangible asset.Accordingly, the remaining difference is allocated togoodwill.Free Company reported net income of P6,000,000 and paidcash dividend of P1,500,000 during the current year.1. What is the implied goodwill from the acquisition?a. 1,400,000b. 1,000,000с. 1,100,000d.2. What amount should be reported as investment incomefor the current year?а. 2,100,000b. 1,950,000c. 1,500,000d. 1,800,000associate at year-end?a. 5,000,000b. 6,500,000c. 6,050,000d. 6,350,000

Since, the difference between Purchase Price and Net Assets cannot be attributed to any identifiable…

Answered: What is the carrying amount of the…

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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Light Inc. had the following activities during the current year: Acquired 4,000 shares of Dark Inc. for P5,200,000 Sold an investment in Lonely Inc. for P7,000,000 when the carrying value was P6,600,000. Acquired a P10,000,000, 4-year certificate of deposit from a bank. During the year, interest of 175,000 was paid to Light Inc. Collected dividends of P240,000 on share dividends. What amount should be included as cash inflows from investing activities? A. 5,200,000B. 6,600,000C. 10,000,000D. 7,000,000
8. Kopi Company acquired all of the outstanding ordinary shares of an acquiree paying P9,000,000 cash. The carrying amount and fair value of the assets and liabilities of the acquiree were: Carrying amount Fair Value Accounts receivable P 1,500,000 Inventory 4,800,000 Land 7,500,000 Property and Equipment 2,500,000 Accounts payable 2,500,000 Bonds Payable 1,900,000 P 1,200,000 3,000,000 5,000,000 2,000,000 2,500,000 1,500,000 What amount should be recognized as goodwill or negative goodwill? a. P 1,900,000 b. P-1,900,000 c. P 2,900,000 d. P-2,900,000
Light Inc. had the following activities during the current year: Acquired 4,000 shares of Dark Inc. for P5,200,000. Sold an investment in Lonely Inc. for P7,000,000 when the carrying value was P6,600,000. Acquired a P10,000,000, 4-year certificate of deposit from a bank. During the year, interest of 175,000 was paid to Light Inc. Collected dividends of P240,000 on share dividends. How much should be reported as cash inflows from operating activities? A. 175,000B. 415,000C. 0D. 250,000
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Armadillo Enterprises acquired the following equity investmentsat the beginning of year 1 as trading investments. Description Number of shares Market price per share Total price Finestra Company 15,000 x $25 $387,500 BVD Company 20,000 X$18 $360,000 Market values at theend of Years 1 &2 are presented below: Market/Fair Value End of year 1 End of year 2 Finestra Company $19 $23 BVD Company |$22 $28 REQUIREMENTS: Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises sells 15,000 shares of BVD Company for $16at the beginning of year 2. Prepare the journal entry to record thesale. Prepare the adjusting journal entry required at the end of year2. Assume that ArmadilloEnterprises now holds these investments asavailable-for-sale. Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises…
M.T. Glass, Inc. purchased the following investments onJanuary 1, 2028:1. 21,000 shares (representing 42%) of AA Company stockfor $546,0002. 18,000 shares (representing 9%) of ZZ Company stockfor $306,000AA Company and ZZ Company reported the following informationfor the years 2028 and 2029:2028: AA Company ZZ CompanyNet income $140,000 $225,000Total dividends paid $ 78,000 $ 53,000Market value at Dec 31 $33 per share $22 per share2029: AA Company ZZ CompanyNet income $210,000 $280,000Total dividends paid $ 90,000 $125,000Market value at Dec 31 $35 per share $23 per shareCalculate the total investments shown in M.T. Glass, Inc.'sDecember 31, 2028 balance sheet (i.e., the balance in theInvestment in AA Company plus the balance in the Investmentin ZZ Company).
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