On July 10, 2021, Romantic Co. acquired 25,000 shares of Baboy Co. for P200,000. Romantic Co does not have significant influence over Baboy Co. The entity also spent additional P15,000 transaction cost. Romantic Co. entity made an irrevocable election of the instrument to be classified as FVOCI. On October 15, 2021, the Romantic Co. sold 15,000 shares for P10.5/share. At year- end, Baboy Co.'s shares were selling at P12 per share. How much is the total amount to be recognized as other comprehensive income in the statement of comprehensive income for the year ?
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- On July 1, 2019, GAR Company acquired 800,000 shares of FAR Company at a price of P13 per share. GAR estimated that the price paid include P1.50 premium in order to gain control over FAR Company. On this date, the fair values of FAR Company’s identifiable assets and liabilities and their carrying values are given below: Book Value Fair ValueCurrent assets P2,000,000 P2,000,000Property, plant and equipment 9,000,000 11,000,000Liabilities P3,000,000 Ordinary shares, P5 par 5,000,000 Retained earnings 3,000,000 Determine the amount of goodwill assuming the non-controlling interest is measured at the proportionate share in the net assets:On January 2, 2022, Promenade Company purchased 25% of Twilight Company's ordinary shares; no goodwill resulted from the purchase. Promenade appropriately carries this investment at equity and the balance in Twilight's investment account was P3,800,000 at December 31, 2022. Twilight reported net income of P2,400,000 for the year and paid dividends amounting to P960,000 during 2022. How much did Promenade pay for its investment in Twilight?On January 1, 2021, Knight Corporation purchases all the outstanding shares of Craig Company for $950,000. It has been decided that Craig Company will use push-down accounting principles to account for this transaction. The current balance sheet is stated at historical cost. The following balance sheet is prepared for Craig Company on January 1, 2021: (see attachment)Knight Corporation receives the following appraisals for Craig Company’s assets and liabilities: Cash . . . . . . . . . . . . . . . . . . . . . . $ 80,000 Accounts receivable . . . . . . . . . . 260,000 Prepaid expenses . . . . . . . . . . . . 20,000 Land. . . . . . . . . . . . . . . . . . . . . . . 250,000 Building (net) . . . . . . . . . . . . . . . . 700,000 Current liabilities . . . . . . . . . . . . . 90,000 Bonds payable . . . . . . . . . . . . . . 280,000 Deferred tax liability . . . . . . . . . . 40,000 1. Record the investment. 2. Prepare the value analysis schedule and the determination and distribution of…
- On January 2, 2022, Promenade Company purchased 25% of Twilight Company’s ordinary shares; no goodwill resulted from the purchase. Promenade appropriately carries this investment at equity and the balance in Twilight’s investment account was P3,800,000 at December 31, 2022. Twilight reported net income of P2,400,000 for the year and paid dividends amounting to P960,000 during 2022. How much did Promenade pay for its investment in Twilight? Present solution in good accounting formOn 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltdissued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of EldoradoLtd. 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: c Carrying amount Fair valueMachinery $40,000 $67,000Fixtures & fittings 60,000 68,000Vehicles 35,000 35,000 Current assets 10,000 12,000Current liabilities (16,000) (18,000)Total net assets…On June 30, 2020, Pearl Co. acquired 80% of the outstanding shares of Scott Co. for P3,125,000. Onthis date Pearl Co.’s net assets had book value of P5,000,000 but with a fair value of P4,062,500. Theliabilities of Scott Co have a book and fair value of P250,000. Pearl Co. paid P62,500 to a CPA Lawyer who facilitated the combination. The fair value of the non-controlling interest on this date was P750,000. Compute the goodwill (gain from bargain price) arising from the above combinationa. P62,500b. P75,000c. P(62,500)d. P(125,000)
- On August 31, 2020, Laida Corporation purchased all the net assets of Magtalas Corporation by transferring cash of P500,000 and issuing 40,000 ordinary shares with par value of P50 (current fair value is P60). The following are expenses incurred and paid by Laida Corporation in connection with the business combination on the date of acquisition: Underwriting costsP10,000Consultant’s fees20,000Newspaper publication fees5,000SEC registration fees8,000Stock exchange listing fees5,000Indirect acquisition costs12,000How much expense is charged to share premium?On January 2, 2019, U Co. purchased 75% of the outstanding shares of N Co. resulting to a goodwill of P60,000. On that date, the non-cash assets of N Co. whose book values did not equal their book values were accounts receivable which was overstated by P4,500 and equipment with a remaining 5 year life on the purchase date which was understated by P50,000. For the year 2010, U and N reported net income of P350,000 and P200,000 each respectively. U’s beginning inventory included merchandise purchased from N Company amounting to P39,000 which was sold to them by N at a 30% markup, 80% of these goods were sold during the year. N, on the other hand, included inventory items which they purchased from U Co. amounting to 18,000. These goods were sold by U at a 25% markup. 90% of these goods were sold by N for the year. What is the Noncontrolling interest's share in the Net income of the subsidiary?On January 2, 2019, U Co. purchased 75% of the outstanding shares of N Co. resulting to a goodwill of P60,000. On that date, the non-cash assets of N Co. whose book values did not equal their book values were accounts receivable which was overstated by P4,500 and equipment with a remaining 5 year life on the purchase date which was understated by P50,000. For the year 2010, U and N reported net income of P350,000 and P200,000 each respectively. U’s beginning inventory included merchandise purchased from N Company amounting to P39,000 which was sold to them by N at a 30% markup, 80% of these goods were sold during the year. N, on the other hand, included inventory items which they purchased from U Co. amounting to 18,000. These goods were sold by U at a 25% markup. 90% of these goods were sold by N for the year. Determine the consolidated net income for 2020. A. Compute for the Equity Shareholder's Net Income B. Compute for the total realized gross profit (from upstream and downstream…
- On January 2, 2019, U Co. purchased 75% of the outstanding shares of N Co. resulting to a goodwill of P60,000. On that date, the non-cash assets of N Co. whose book values did not equal their book values were accounts receivable which was overstated by P4,500 and equipment with a remaining 5 year life on the purchase date which was understated by P50,000. For the year 2010, U and N reported net income of P350,000 and P200,000 each respectively. U’s beginning inventory included merchandise purchased from N Company amounting to P39,000 which was sold to them by N at a 30% markup, 80% of these goods were sold during the year. N, on the other hand, included inventory items which they purchased from U Co. amounting to 18,000. These goods were sold by U at a 25% markup. 90% of these goods were sold by N for the year. Determine the consolidated net income for 2020. compute for the Equity Shareholder's Net Income.On January 2, 2019, U Co. purchased 75% of the outstanding shares of N Co. resulting to a goodwill of P60,000. On that date, the non-cash assets of N Co. whose book values did not equal their book values were accounts receivable which was overstated by P4,500 and equipment with a remaining 5 year life on the purchase date which was understated by P50,000. For the year 2010, U and N reported net income of P350,000 and P200,000 each respectively. U’s beginning inventory included merchandise purchased from N Company amounting to P39,000 which was sold to them by N at a 30% markup, 80% of these goods were sold during the year. N, on the other hand, included inventory items which they purchased from U Co. amounting to 18,000. These goods were sold by U at a 25% markup. 90% of these goods were sold by N for the year. a. Determine the consolidated net income for 2020. b. What is the Noncontrolling interest's share in the Net income of the subsidiary?On January 2, 2019, U Co. purchased 75% of the outstanding shares of N Co. resulting to a goodwill of P60,000. On that date, the non-cash assets of N Co. whose book values did not equal their book values were accounts receivable which was overstated by P4,500 and equipment with a remaining 5 year life on the purchase date which was understated by P50,000. For the year 2010, U and N reported net income of P350,000 and P200,000 each respectively. U’s beginning inventory included merchandise purchased from N Company amounting to P39,000 which was sold to them by N at a 30% markup, 80% of these goods were sold during the year. N, on the other hand, included inventory items which they purchased from U Co. amounting to 18,000. These goods were sold by U at a 25% markup. 90% of these goods were sold by N for the year. Determine the consolidated net income for 2020. compute for the total realized gross profit (from upstream and downstream sales)