January 1, 2021, ABC acquired a 10% interest in an investee for P3,000,000. The investment was accounted for under the cost method. During 2021, the investee reported net income of P4,000,000 and paid dividend of P1,000,000. On January 1, 2021, the entity acquired a further 15% interest in the investee for P8,500,000. On such date, the carrying amount of the net assets of the investee was P36,000,000 and the fair value of the 10
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On January 1, 2021, ABC acquired a 10% interest in an investee for P3,000,000. The investment was accounted for under the cost method. During 2021, the investee reported net income of P4,000,000 and paid dividend of P1,000,000. On January 1, 2021, the entity acquired a further 15% interest in the investee for P8,500,000. On such date, the carrying amount of the net assets of the investee was P36,000,000 and the fair value of the 10% existing interest was P3,500,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value was P4,000,000 greater than carrying amount. The equipment had a remaining life of 5 years. The investee reported net income of P8,000,000 for 2021 and paid dividend of P5,000,000 on December 31, 2021. What total amount of income should be recognized by the investor in 2021?
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- On January 1, 2019, Aboitiz Corporation acquired 30% of the voting share capital of another entity for P2,000,000 which was equal to the carrying amount of interest acquired. The investee reported net income of P800,000 for 2019 and paid dividend of P500,000 on December 31, 2019. The investee reported net income of P1,000,000 for the six months ended June 30, 2020 and P2,500,000 for the year ended December 31, 2020, but paid no dividend during 2020. On July 1,2020, the investor sold half of the investment for P1,500,000. The fair value of the retained investment was P1,600,000 on July 1, 2020 until January 1, 2021.The retained investment is to be held as nontrading measured at FVTOCI. What is the amount of gain from remeasurement of investment? a. P-0- b. P405,000 c. P300,000 d. P705,0001. On January 1, 2019, Blackpink Company acquired a 10% interest in an investee for P3,000,000. The investment was accounted for a fair value through other comprehensive income. The fair value of the investment was P3,500,000 on December 31, 2019. On January 1, 2020, the entity acquired a further 15% interest in the investee for P8,500,000. On such date, the carrying amount of the net assets of the investee was P36,000,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value was P4,000,000 greater than carrying amount. The equipment had a remaining life of 5 years. The investee reported net income of P8,000,000 for 2020 and paid dividend of P5,000,000 on December 31, 2020. What is the carrying amount of the investment in associate on December 31, 2020? 2. pictureOn January 1, 2019, FFF Company acquired a 10% interest in an investee for P3,000,000. The investment was accounted for using the cost method. On January 1, 2020, the entity acquired a further 15% interest in the investee for P6,750,000. On such date, the carrying amount of the net assets of the investee was P36,000,000 and the fair value of the 10% interest was P4,500,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value exceeds carrying amount by P4,000,000. The equipment has a remaining life of 5 years. The investee reported net income of P8,000,000 for 2020 and paid cash dividend of P5,000,000 on December 31, 2020. What is the implied goodwill arising from the acquisition?
- On January 1, 2019, FFF Company acquired a 10% interest in an investee for P3,000,000. The investment was accounted for using the cost method. On January 1, 2020, the entity acquired a further 15% interest in the investee for P6,750,000. On such date, the carrying amount of the net assets of the investee was P36,000,000 and the fair value of the 10% interest was P4,500,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value exceeds carrying amount by P4,000,000. The equipment has a remaining life of 5 years. The investee reported net income of P8,000,000 for 2020 and paid cash dividend of P5,000,000 on December 31, 2020. What amount of gain on re-measurement to equity should be recognized in 2020?On January 1, 2019, an entity acquired 30% of the voting share capital of another entity for 2,000,000, which was equal to the carrying amount of interest, acquired. The investee reported net income of P1,500,000 for 2019 and paid dividend of P500, 000 on December 31, 2019. The investee reported net income of P1,000,000 for the six months ended June 30, 2020 and P2,500,000 for the year ended December 31, 2020 but paid dividend of P1,000,000 on October 2020. On July 1, 2020, the investor sold half of the investment for P2,000,000. The fair value of the retained investment is P2,200,000 on July 1, 2020 and P2,400,000 on December 31, 2020. The retained investments is to be measured at FVPL. 1. What amount of gain or sale of investment should be reported for 2020? a. 850,000 b. 700,000 c. 775,000 d. 500,000 2. What total amount of income should be reported in 2020? a. 2,250,000 b. 2,100,000 c. 1,950,000 d. 2,050,000On 1 July 2021, King Ltd acquired all the share capital of Queen Ltd for $1,800,000, and on that date Queen Ltd.'s equity were as follows: Share capital $1,200,000; Revaluation surplus $500,000 and Retained earnings $200,000. All the assets and liabilities of Queen Ltd. were recorded at fair value on 1 July 2021. During the financial year 2022, the following intragroup transactions occurred between King Ltd and Queen Ltd: Queen Ltd sold land to King Ltd for $400,000, which was $100,000 above cost. The land was still hold by King Ltd. King Ltd sold an equipment to Queen Ltd for $400,000. The carrying amount of equipment to King Ltd of $320,000. Both entities depreciate equipment at a rate of 10% p.a. on cost. Queen Ltd sold inventories costing $160,000 to King Ltd for $180,000. 1/4th of the inventories were still on hand with King Ltd. King Ltd received $15,000 of service revenue from Queen Ltd. Queen Ltd paid dividend of $30,000 and interest on loan of $8,000 to King Ltd. The tax rate…
- On January 1, 2019, FFF Company acquired a 10% interest in an investee for P3,000,000. The investment was accounted for using the cost method. On January 1, 2020, the entity acquired a further 15% interest in the investee for P6,750,000. On such date, the carrying amount of the net assets of the investee was P36,000,000 and the fair value of the 10% interest was P4,500,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value exceeds carrying amount by P4,000,000. The equipment has a remaining life of 5 years. The investee reported net income of P8,000,000 for 2020 and paid cash dividend of P5,000,000 on December 31, 2020. What is the carrying amount of the investment in associate on December 31, 2020?On 1 July 2019, Brad Ltd acquired all assets and liabilities of Pitt Ltd. In exchange for these assets and liabilities, Brad Ltd issued 100,000 shares that at date of issue had a fair value of $5.20 per share. Costs of issuing these shares amounted to $1,000. Legal cost associated with the acquisition of Pitt Ltd amounted to $1,200.The assets and liabilities of Pitt Ltd at 1 July 2019 were as follows:Carrying Amount ($) Fair Value ($)AssetsCash 2,000 2,000Accounts receivable 10,000 10,000Inventory 64,000 68,000Equipment 320,000 232,000Accumulated depn - Equipment (96,000) -Patents 280,000 280,000LiabilitiesAccounts payable (16,000) (16,000)Debentures (64,000) (64,000)Required:a) Prepare the acquisition analysis at 1 July 2019 for the acquisition of Pitt Ltd by Brad Ltd.b) Prepare the journal entries in the records of Brad Ltd at 1 July 2019.On January 1, 2021, Entity F acquired 25% of the shares of Pot, Inc. for P425,000. At this date all identifiable assets and liabilities of Pot, Inc. were recorded at amounts equal to fair value, and the equality of Pot consisted of the following: Share capital P1,000,000 General reserve P300,000 Asset revaluation surplus P200,000 Retained earnings P200,000 In 2021, Pot reported profit of P250,000. P50,000 of the asset revaluation surplus was realized in 2021. Pot paid P40,000 divedend and transferred P30,000 to general reserve. What is the carrying amount of the investment in Pot, Inc. as of December 31,2021? a. P465,000 b. P477,000 c. P482,500 d. P490,000
- On January 1, 2021, OBDURATE Co. acquired 30% ownership interest in STUBBORN, Inc. for P200,000. Because the investment gave OBDURATE significant influence over STUBBORN, the investment was accounted for under the equity method in accordance with PAS 28. From 2021 to the end of 20x3, OBDURATE recognized P100,000 net share in the profits of the associate and P20,000 share in dividends. Therefore, the carrying amount of the investment in associate account on January 1, 20x3, is P280,000. On January 1, 20x4, OBDURATE acquired additional 60% ownership interest in STUBBORN, Inc. for P1,600,000. As of this date, OBDURATE has identified the following: a. The previously held 30% interest has a fair value of P360,000. b. STUBBORN's net identifiable assets have a fair value of P2,000,000. OBDURATE elected to measure non-controlling interests at the non-controlling interest's proportionate share of STUBBORN's identifiable net assets. C. Requirement: Compute for the goodwill.Question: The total amount reported in 2019 profit or loss is? On January 1, 2019, an entity purchased 15,000 shares of another entity representing a 12% interest for P2,500,000. The entity elected to measure the investment at FVOCI. The investee reported net income of P3,000,000 and paid dividends of P15 per share in 2019. The fair value of the investment was P2.800.000 on December 31, 2019. On January 1, 2020, the entity paid P3,000,000 for 16.250 additional shares of the investee. The fair value of the 12% interest did not change on this date. The fair values of the identifiable net assets of the investee equal carrying amount of P15,000,000 on such date except for land whose fair value exceeded carrying amount by P3,000,000. For the year ended December 31, 2020, the investee reported net income of P6,000,000 and paid dividends of P20 per share.On January 2, 2021, Normal Inc. acquired 15% interest in Laco Co. by paying P1,500,000 for 7,500 ordinary shares. On this date, the net assets of Laco Co. totaled P9 million. The investment was classified as a financial asset at fair value through other comprehensive income. The fair values of Laco Co.s identifiable assets and liabilities approximate their book values. On August 1, 2021, Normal received dividends of P4 per share from Laco Co. Fair value of the stocks on December 31, 2021 was P190. Net income reported by Laco for the year ended amounted to P1,500,000. On July 1, 2022, Normal Inc. paid P1 million to purchase 5,000 additional shares of Laco Co. from another shareholder. On this date the fair value of the net assets exceeds carrying value by P500,000 attributable to depreciable asset with estimated remaining life of 5 years. On February 1, 2022, cash dividends of P5 were received while dividends of P6 were received on August 1, 2022. Net income reported for the year ended…