How much is the consolidated profit to be reported on December 31, 2021? On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P15 per share. On this date,XYZ's equity comprised of P50,000 share capital and P24,000 retained earnings. NCI was measured at its proportionate share in XYZ'snet identifiable assets.XYZ's assets and liabilities on January 1, 2021 approximate their fair values except for the following:CarryingFairFair valueXYZ, Inc.атоunts23,000values adjustments (FVA)8,000Inventory31,000Equipment (4 yrs. remaininglife)Accumulated depreciationTotals10,00060,000(10,000) (12,000)63,00050,000(2,000)16,00079,000XYZ, Inc. declared and paid dividends of P10,000 during 2021. There was no impairment in goodwill. The year-end individualstatements of profit or loss are shown below:Statements of profit or lossFor the year ended December 31, 2021АВС Со.XYZ, Inc.Sales120,000(72,000)48,000(10,000)(18,000)300,000Cost of goods soldGross profitDepreciation expense(165,000)135,000(40,000)(32,000)(3,000)8,000Distribution costsInterest expenseDividend incomeProfit for the year20,00068,000How much is the consolidated profit to be reported on December 31,2021?

On 01.01.2021, ABC Co. acquired interest of XYZ Inc. = 80% Purchase consideration = 5000 shares with…

On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P15 per share. On this date, XYZ's equity comprised of P50,000 share capital and P24,000 retained earnings. NCI was measured at its proportionate share in XYZ's net identifiable assets. XYZ's assets and liabilities on January 1, 2021 approximate their fair values except for the following: Fair value Carrying Fair XYZ, Inc. values adjustments (FVA) 31,000 amounts Inventory Equipment (4 yrs. remaining life) Accumulated depreciation Totals 23,000 8,000 60,000 50,000 (10,000) (12,000) 10,000 (2,000) 16,000 63,000 79,000 XYZ, Inc. declared and paid dividends of P10,000 during 2021. There was no impairment in goodwill. The year-end individual statements of profit or loss are shown below: Statements of profit or loss For the year ended December 31, 2021 АВС Со. 300,000 (165,000) 135,000 (40,000) (32,000) (3,000) 8,000 68,000 XYZ, Inc. Sales 120,000 Cost of goods sold Gross profit (72,000) 48,000 (10,000) (18,000) Depreciation expense Distribution costs Interest expense Dividend income Profit for the year 20,000 How much is the consolidated profit to be reported on December 31,2021?

On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P15 per share. On this date, XYZ's equity comprised of P50,000 share capital and P24,000 retained earnings. NCI was measured at its proportionate share in XYZ's net identifiable assets. XYZ's assets and liabilities on January 1, 2021 approximate their fair values except for the following: Fair value Carrying Fair XYZ, Inc. values adjustments (FVA) 31,000 amounts Inventory Equipment (4 yrs. remaining life) Accumulated depreciation Totals 23,000 8,000 60,000 50,000 (10,000) (12,000) 10,000 (2,000) 16,000 63,000 79,000 XYZ, Inc. declared and paid dividends of P10,000 during 2021. There was no impairment in goodwill. The year-end individual statements of profit or loss are shown below: Statements of profit or loss For the year ended December 31, 2021 АВС Со. 300,000 (165,000) 135,000 (40,000) (32,000) (3,000) 8,000 68,000 XYZ, Inc. Sales 120,000 Cost of goods sold Gross profit (72,000) 48,000 (10,000) (18,000) Depreciation expense Distribution costs Interest expense Dividend income Profit for the year 20,000 How much is the consolidated profit to be reported on December 31,2021?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 14RE

See similar textbooks

Similar questions

On January 1, 2019, ALUCARD Co. acquired 80% interest in BERTHOLD, Inc. by issuing 5,000 shares with fair value of P15 per share. On this date, BERTHOLD's equity comprised of P50,000 share capital and P24,000 retained earnings. NCI was measured at its proportionate share in BERTHOLD's net identifiable assets. BERTHOLD's assets and liabilities on January 1, 2019 approximate their fair values except for the following: Fair value Carrying Fair adjustments (FVA) 8,000 BERTHOLD, Inc. атоunts values Inventory 23,000 31,000 Equipment (4 yrs. remaining life) Accumulated depreciation Totals 50,000 60,000 10,000 (10,000) (12,000) 63,000 (2,000) 16,000 79,000 BERTHOLD, Inc. declared and paid dividends of P6,000 during 2019. There was no impairment in goodwill. The year-end individual statements of profit or loss are shown below: Statements of profit or loss For the year ended December 31, 2019 ALUCARD Co. BERTHOLD, Inc. Sales 300,000 (165,000) 120,000 Cost of goods sold (72,000) Gross profit…
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…
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…
On January 1, 2021, PingPing Corp. acquired all the assets and liabilities of Willy Corp. by issuing shares of P10 par value ordinary shares. PingPing Corp. shares has a market value of P40 per share. The statement of financial position of Willy Corp. as of January 1, 2021, is as follows: Current assets – P640,000; Equipment – P1,760,000; Liabilities – P800,000; Common shares (P4 par) – P160,000; Share premium – P640,000; Retained earnings – P800,000. The current assets and equipment have fair values of P800,000 and P3,200,000, respectively. PinPing Corp. issued sufficient number of shares so that the fair market values of the shares issued is equal to the fair market value of Willy Corp.’s net assets. How many ordinary shares should PingPing Corp. must issue to have a gain on bargain purchase of P200,000? *... a. 85,000 shares b. 74,000 shares c. 75,000 shares d. 84,000 shares pls. answer it asap. thank you
On January 1, 2019, ALUCARD Co. acquired 80% interest in BERTHOLD, Inc. by issuing 5,000 shares with fair value of ₱15 per share. On this date, BERTHOLD’s equity comprised of ₱50,000 share capital and ₱24,000 retained earnings. NCI was measured at its proportionate share in BERTHOLD’s net identifiable assets. BERTHOLD’s assets and liabilities on January 1, 2019 approximate their fair values except for the following: BERTHOLD, Inc. Carrying amounts Fair values Fair value adjustments (FVA) Inventory 23,000 31,000 8,000 Equipment (4 yrs. remaining life) 50,000 60,000 10,000 Accumulated depreciation (10,000) (12,000) (2,000) Totals 63,000 79,000 16,000 BERTHOLD, Inc. declared and paid dividends of ₱6,000 during 2019. There was no impairment in goodwill. The year-end individual statements of profit or loss are shown below: Statements of profit or loss For the year ended December 31, 2019 ALUCARD Co.…
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, LISAYAH LTD. acquired 70% of outstanding ordinary shares of JICHU INC. at aprice of P210,000. On the same date, the net assets of JICHU INC. were reported at P260,000. OnJanuary 1, 2021, LISAYAH LTD. reported retained earnings of P2,000,000 while JICHU INC. reportedretained earnings of P200,000.All the assets and liabilities of JICHU INC. are fairly valued except machinery, which is undervaluedby P80,000 and inventory which is overvalued by P10,000. The said machinery has remaining usefullife of five years while 40% of the said inventory remained unsold at the end of 2021.For the year ended December 31, 2021, LISAYAH LTD. reported net income of P1,000,000 anddeclared dividends of P200,000 in the separate financial statements while JICHU INC. reported netincome of P150,000 and declared dividends of P20,000 in the separate financial statements. LISAYAHLTD. accounted the investment in JICHU INC. using cost method in the separate financial statements.…
On January 2, 2021, X Co. acquired all the ordinary share of Y Co. for P2,060,000. On that date, Y Co. reported the following stockholders’ equity account balances: Ordinary share P800,000, Share premium P620,000, accumulated profits P300,000. The assets and liabilities of Y Co had book values that were approximately equal to its fair values, except building that was undervalued by P400,000, and equipment that was overvalued by P120,000. The building that was undervalued has an estimated life of 20 years and the equipment with 5 years useful life. Prior to acquisition, Y Co. has unimpaired goodwill in the amount of P10,000. What is the amount of goodwill to be reported in the consolidated Statement of Financial Position?
1 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…
1 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…
P Company acquired the net assets of S Company by issuing 150,000 shares of its P10 par value ordinary share capital on July 1, 2021. The market value of the shares was P12. P also paid direct costs of P100,000 which includes P15,000 cost of issuing and registering new shares. The financial statements of P and S were (see image below). The fair value and book value of S Company's identifiable assets and liabilities were the same except Equipment which was undervalued by P250.000 and lInventory which was overvalued by P100,000. Assuming that P Company is an SME. How much is the goodwill/gain on bargain purchase? " P S Cash Inventory Equipment Other Assets 150,000 320,000 4,350,000 500,000 5,320,000 120,000 400,000 1,750,000 500,000 2,770,000 Total Accounts Payable Notes Payable Share Capital, P10 par 1,000,000 1,300,000 2,000,000 1,000,000 20,000 5,320,000 300,000 660,000 500,000 100,000 1,210,000 2,770,000 Share Premium Retained Earnings Total
On January 1, 2021, Manette Company acquired 100,000 ordinary shares of Nette Company for P6,000,000. At the date of purchase, Nette had 500,000 outstanding ordinary shares and shareholders' equity of P20,000,000. During the year 2021, Nette reported profit of P1,000,000 and declared and paid cash dividends of P1.50 per share. The fair value of Nette's share at December 31, 2021 was P68. What amount shall Manette Company recognize in profit or loss for the year 2021 if it is able to exercise significant influence over Nette Company as a result of the acquisition? A P950,000 B) P200,000 P350,000 P150,000