Azucena Co, acquired all the assets and liabilities of Golf Co. for P2,600,000. On acquisition date, Golf's identifiable assets and liabilities have fair values of P5,900,000 and P3,500,000 respectively. Relevant information follows: a. Azucena is renting out a building to Golf Co, on an operating lease. The terms of the lease compared with market terms are favorable. The fair values of the differential is P90,000. b. Golf is a defendant on a pending lawsuit. No provision was recognized because Azucena's legal counsel believes they will successfully defend the case. The fair value of settling the lawsuit is P10,000. How much is the goodwill (gain on bargain purchase)?
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- Ayayai Automotive is looking to expand its operations and has approached Dynatech Garage to acquire its business. Dynatech has agreed to sell if Ayayai assumes the mortgage on Dynatech's building as part of the sale. The fair value of Dynatech's identifiable assets and identifiable liabilities are: Inventory: 149000. Buildings: 949000. Land: 349000. Mortage payable (274000). Net identifiable assets: 1,173,000. Assuming Ayayai purchases the business for $Record the journal entry for the purchase by Ayayai Automotive. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles Debit Credit 1,324,000On January 1, 20x8, Pares Company classified its property interest under an operating lease from Allan Company, the lessor, as investment property. The asset was recognized at P 8M with an estimated remaining useful life of 15 years. The fair value of such asset is P 8.1M on December 31, 20x8. Pares adopts the cost model in valuing its investment properties subsequent to initial recognition. The investment property account of Pares, excluding the transaction described above, is composed of the following Asset CV 1/1/x8 Remaining Useful Life FV 12/31/x8 A 4.5M NA 5M B 6.55M 16 4.89M C 10.6M 20 11.050MIf Pares uses the straight line method in computing for depreciation expense, how much is the net amount of investment property to be reported in the December 31, 20x8 statement of financial positionA Ltd owns an owner-occupied asset that is measured using the revaluation model. The asset’scarrying amount at the end of the financial year is R20 000. The fair value of the asset is R27 000.The entity has determined the fair value less costs to sell of the asset as R26 000 and the value inuse as R32 000.Required:Explain how you would calculate the carrying value of the asset and at what value the asset shouldbe presented at in the financial statements.
- On January 1, 2020 ABC Company sold a machinery to XYZ Company for P1,900,000. Because of the entity's commitments to its customers to provide their needs for the next four years, ABC simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under PFRS 15. Information relating to this transaction follows: Fair value of the machinery Carrying amount of machinery Remaining useful life of machinery Lease term 2,200,000 1,700,000 8 years 5 years 500,000 10% Annual rent payable at the end of each year Market rate of interest Present value of 1 at 10% for four periods Present value of an ordinary annuity of 1 for four periods 0.6830 3.1699 Required: Gain on sale and leasebackOn January 1, 20x8, Pares Company classified its property interest under an operating lease from Allan Company, the lessor, as an investment property. The asset was recognized at P 8M with an estimated remaining useful life of 15 years. The fair value of such asset is P 8.1M on December 31, 20x8. Pares adopts the cost model in valuing its investment properties subsequent to initial recognition. The investment property account of Pares, excluding the transaction described above, is composed of the following: Asset CV 1/1/x8 Remaining Useful Life FV 12/31/x8 A 4.5M NA 5M B 6.55M 16 4.89M C 10.6M 20 11.050M If Pares uses the straight-line method in computing for depreciation expense, how much is the net amount of investment property to be reported in the December 31, 20x8 statement of financial position?Lei Company acquired a financial asset at its market value of P4,800,000. Broker fees of P300,000 were incurred in relation to the purchase. At what amount should the financial asset initially be recognized if it is classified as: 1. At Fair value through profit or loss _________________ 2. As available for sale _____________________
- Entity A acquires a building for P1,000,000. The building is to be leased out under various operating leases. The building has an estimated useful life of 10 years and zero residual value. Entity A uses the cost model for its property, plant and equipment and the fair value model for its investment property. At the end of Year 1, the building is assessed to have a fair value of P1,080,000.How much should Entity A recognize in profit or loss in relation to the building?You Company owns land and building classified as investment property . The land and building is being leased out under operating leases. The company uses the fair value model for all its other investment property. Data relating to the land and building follows: Cost FV Dec. 31, 2020 FV Dec. 31, 2021Land -------- P 10,000,000 ----- P14,000,000 -------P15,500,000Building ----- 20,000,000 ------ 9,000,000 -------- 8,500,000 On December 31, 2021, the company decided to use the land and building for its operations. At what amount should the land and building be recorded on December 31, 2021?On Jan. 1, 2022, ABC Co. sold a machinery to XYZ Co. for P1,900,000. Because of the entity's commitments to its customers to provide their needs for the next 4 years, ABC simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows:FV of machinery, P2,200,000CA of machinery, P1,700,000Remaining useful life of machinery, 6 yearsLease term, 4 yearsAnnual rent payable at the end of each year, P500,000Market rate of interest, 10%PVF, ordinary annuity, 10%, 4 periods, 3.1699PVF, ordinary annuity, 10%, 6 periods, 4.3553PVF, single payment, 10%, 4 periods, 0.6830PVF, single payment, 10%, 6 periods, 0.5645What amount of lease liability should ABC record on Jan. 1, 2022?
- Hancock Company leased many assets and capitalized most of the leased assets. On December 31, 2020, the entity had the following balances in relation to a piece of specialized equipment: Equipment under finance lease 4,000,000 Accumulated depreciation 2,465,000 Lease liability 1,300,000 Depreciation has been recorded up to end of the year, and no accrued interest is involved. On December 31, 2020, the entity decided to purchase the equipment for P 1,600,000 and paid cash to complete the purchase. Required: Prepare journal entry to record the actual purchase of the equipment on the books Hancock Company.He Company owns land and building classified as investment property . The land and building is being leased out under operating leases. The company uses the fair value model for all its other investment property. Data relating to the land and building follows: Cost FV Dec. 31, 2020 FV Dec. 31, 2021 FV Dec. 31, 2021Land -------- P 10,000,000 -- P14,000,000 -------P15,500,000 ------- P 17,000,000Building ----- 20,000,000 --- 9,000,000 -------- 9,500,000 ------- 10,000,000 How much fair value gain should He company report in profit or loss for year 2021?She Company owns land and building classified as investment property . The land and building is being leased out under operating leases. The company uses the fair value model for all its other investment property. Data relating to the land and building follows: Cost FV Dec. 31, 2020 FV Dec. 31, 2021Land -------- P 10,000,000 ----- P14,000,000 -------P15,500,000Building ----- 20,000,000 ------ 9,000,000 -------- 8,500,000 On December 31, 2021, the company decided to use the land and building for its operations. How much gain on is to be recorded by She on reclassification of the asset?