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- On January 1, 2021, April Company purchased 40% of the outstanding shares of another entity for P5,000,000 when the net assets of the investee amounted to P10,000,000. At acquisition date, the carrying amount of the identifiable assets and liabilities of the investee were equal to their fair values, except for equipment for which the fair value was P2,000,000 greater than its carrying amount and inventory whose fair value was P1,000,000 greater than its cost. The equipment has a remaining life of 4 years and the inventory was all sod during 2021. The investee reported net income of P6,000,000 for 2021 and paid no dividends during 2021. What is the maximum amount which could be included in April Company’s income before tax to reflect April’s equity in earnings of the investee?On July 1, 2019, CaviteCorporation purchased 40% of the outstanding ordinary shares of another entity for P500,000 when the net assets of the investee amounted to P1,000,000. At acquisition date, the carrying amounts of the identifiable assets and liabilities of the investee were equal to their fair value, except for equipment for which the fair value was P200,000 greater than carrying amount and inventory whose fair value was P100,000 greater than the cost. The equipment has a remaining life of 5 years and the inventory was all sold during 2019. The investee reported net income of P550,000 for 2019 and paid dividends amounting to P800,000. Required: What is the maximum amount which could be included in income before tax to reflect the investor’s equity in earnings of the investee for 2019?On 1 July 2022, Dean Ltd acquired the remaining 80% of the issued shares of Lewis Ltd for shares in Dean Ltd with a fair value of $1 000 000. At that date, the financial statements of Lewis Ltd showed the following information. All the assets and liabilities of Lewis Ltd were recorded at amounts equal to their fair values at the acquisition date, except some equipment recorded at $50 000 below its fair value with a related accumulated depreciation of $80 000. Assume the equipment has not been revalued in the subsidiaries accounts. Also, Dean Ltd identified at acquisition date a contingent liability related to a lawsuit where Lewis Ltd was sued by a former supplier and attached a fair value of $40 000 to that liability. The previous held interest by Dean Ltd in Lewis Ltd (ie 20% of the issued shares) was recognised by in Dean Ltd.’s accounts at the fair value at acquisition date of $250 000. Dean Ltd incurred $15 000 in acquisition related costs including $10 000 in share issue costs.…
- On January 2, 2021, ABC Co. acquired 80% of XYZ Co. ordinary shares for P810,000. An amount of P37,500 of the excess is attributable to goodwill and the balance to a depreciable assets with an economic life of ten years. NCI is measured at fair value on the date of acquisition. On the date of acquisition, shareholder's equity accounts of the two entities were as follows: АВС Ordinary Shares - 1,312,500 Retained Earnings - 1,950,000 XYZ Ordinary Shares - 300,000 Retained Earnings - 525,000 On December 31, 2021, XYZ reported net income of 131,250 and paid dividends of P172,500. Goodwill have been impaired and should be reported at P7,500 on December 31, 2021. #6. What is the non-controlling interest in profit of XYZ on December 31, 2021? Select the correct response: 26,250.00 17,250.00 23,250.00 23,437.50On January 1, 2021, A Company acquired a 50% interest in B for P60,000,000. A Company already held a 20% interest which had been acquired for P20,000,000 but which was valued at P24,000,000 at January 1, 2021. The fair value of the NCI at January 1, 2021 was P30,000,000, and the fair value of the identifiable net assets of B was P110,000,000. How much is the goodwill to be recognized as a result of the business combination? * a. P 0 b. P 3,000,000 c. P 4,000,000 d. P 7,000,000On May 1, 2021, P Corp. purchased 75% of S Co.’s P10 par ordinaryshares for P990,000. On this date, the carrying amount of S’s net assetswas P1,000,000. The fair values of S Co.’s identifiable assets andliabilities were the same as their carrying amounts except for plant assets(net), which were P150,000 in excess of the carrying amount. Theestimated remaining life of the asset is 5 years. For the year endedDecember 31, 2021, S had net income of P320,000 and paid cashdividends to P Corp. of P115,000 (all coming from post-acquisitionRetained Earnings). Loss on impairment of goodwill in 2021 amounted toP20,000. P Corp. uses the fair value method in measuring non-controllinginterest. Revenues were earned evenly throughout the year.Determine the goodwill on the December 31, 2021 consolidated balancesheet.
- On May 1, 2021, P Corp. purchased 75% of S Co.’s P10 par ordinaryshares for P990,000. On this date, the carrying amount of S’s net assetswas P1,000,000. The fair values of S Co.’s identifiable assets andliabilities were the same as their carrying amounts except for plant assets(net), which were P150,000 in excess of the carrying amount. Theestimated remaining life of the asset is 5 years. For the year endedDecember 31, 2021, S had net income of P320,000 and paid cashdividends to P Corp. of P115,000 (all coming from post-acquisitionRetained Earnings). Loss on impairment of goodwill in 2021 amounted toP20,000. P Corp. uses the fair value method in measuring non-controllinginterest. Revenues were earned evenly throughout the year.Determine the non-controlling interest in net income of subsidiary onDecember 31, 2021.On January 2, 2021. PABC corporation acquired 75% of the outstanding ordinaryshares of SDEF Company for P513,000 cash, excluding direct acquisition costs.The investment was accounted for by the cost method. On January 2, 2021,SDEF’s identifiable net assets (book value and fair value) were P570,000. SDEF’snet income for the year ended December 31, 2021 was P304,000. During 2021,PABC received P21,600 cash dividends from SDEF. There were no other intercompany transactions. The balance of the Non-controlling interest in Net assetsof subsidiary account on December 31, 2021 is A. 211,300B. 76,000C. 218,300D. 218,5006. On December 31, 2019, Stefan company purchased for 30 per share all 300,000 of Elena company’s outstanding ordinary shares. On this date, the acquiree’s statement of financial position showed net assets of P7,500,000. Additionally, the fair value of the acquiree’s identifiable assets on this date was 600,000 in excess of carrying amount. In the statement of financial position, what amount should be reported as goodwill as a result ofthe acquisition?
- Reuniclus Company acquired 55% of the outstanding common stock of Vanillite Company on August 1, 2019 at a total cost of P5,005,000. At acquisition date, Vanillite 's common stock and retained earnings amounted to P200,000 and P4,800,000, respectively. All of Vanillite 's assets and liabilities had fair values equal to book values as of the acquisition date except for patents which had a fair value of P1,800,000.and a book value of P400,000. Reuniclus had an inventory with a fair value of P800,000 and a carrying amount of P700,000. All inventories was sold at the end of the year. The patents have a remaining life of five years. For 2019, Vanillite had a net income of P1,600,000, incurred evenly and Reuniclus had a net income of P2,000,000.Compute the net income attributable to the non-controlling interest? A. P202,500 B. P247,500 C. Answer not given D. P549,000 E. P594,000On January 1, 2020, Albay Company acquired a 30% interest in Bataan Company for P2,430,000. On this date, Bataan Company’s shareholders’ equity was P5,000,000. At acquisition date, the carrying amount of Bataan Company’s identifiable net assets approximated their fair values, except for the following: Page 2of 2Excess of Fair Value Over Carrying ValueLandP2,000,000Inventory600,000 Machinery500,000All of the inventories that are undervalued onJanuary 1, 2020 was sold during the year. The machinery is being depreciated using the straight-line method and had a remaining useful life of 4 years onJanuary 1, 2020. For the year 2020, Bataan Company reported profit of P1,520,000 and paid its shareholders dividends of P650,000.Required: What is the carrying amount of the investment in associates onDecember 31, 2020?On July 19, 2021, SUNOB acquired 60% of the outstanding shares of YSAE. The business combination resulted to a gain on bargain purchase of P200,000. The consideration paid was exactly the fair value for the 60% outstanding stocks, and the fair value of the non-controlling interest is not given. Fair value of the net assets of YSAE amounted to P1,000,000 on that date. How much is the gain on acquisition attributable to SUNOB? Group of answer choices a.600,000 b.120,000 c.Zero d.200,000
