On July 1, 2020, Brandon SE purchased Mills Company by paying $130,000 cash. On July 1, 2020, the fair value of the net assets of Mills Company was as follows. Buildings (net) (4 years remaining useful life) $ 30,000 Patent (4 years remaining useful life) 10,000 Land 25,000 Accounts receivable 12,000 Cash 50,000 Accounts payable 10,000 What are the effects of this combination transaction on Brandon's statements on 31/12/2020?
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- On October 1, 2020, Generosity Company declared a property dividend of machinery payable on April 1, 2021. The carrying amount of the machinery is P4,000,000 on October 1, 2020.The machinery had the following fair value: Oct. 1, 2020 3,800,000 Dec. 31, 2020 3,600,000 April 1, 2020 3,500,000 What id the dividends payable and loss on distribution of property dividend?On January 1, 2021, Moo Company sold an asset with a carrying amount of P6,000,000 to Boo Company for P8,000,000. The asset had a fair value of P7,500,000 and a remaining useful life of six years. The asset was immediately leased back to Moo Company for a term of four years and annual rentals of P1,500,000 payable every yearend. The transfer qualified for as a sale and the lease was accounted for as a finance lease with an implicit interest rate of 12%. How much is the 2021 net income/loss of Moo Company relating to the sale and leaseback transaction? [Indicate whether it is a gain or loss] How much is the 2021 net income/loss of BooCompany relating to the sale and leaseback transaction? [Indicate whether it is a gain or loss] How much is the carrying amount of Moo Company's asset as of yearend 2021? How much is the 2022 net income/loss of Moo Company relating to the sale and leaseback transaction? [Indicate whether it is a gain or loss] How much is the 2022 net income/loss of Boo…On July 1, 2020, Blue George Company purchased 25% interest of Pink Conrad for P150,000. Blue George incurred transaction cost equal to 5% on the transaction price. On October 1, 2020, Pink Conrad declared dividends of P80,000. At the end of 2020, Pink Conrad reported net income of P200,000. On January 1, 2021, the fair values of Pink Conrad's net assets were as follows:Current Assets - P100,000;Equipment - P150,000;Patent – P120,000;Land - P50,000;Buildings - P300,000; andLiabilities - P80,000. On January 1, 2021, Blue George Company purchased 50% interest of the Pink Conrad Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. Pink Conrad paid for the legal fees of P10,000 and securities SEC registration of P20,000 which was reimbursed by Blue George. The Patent of Pink Conrad refers to the technology purchased by Pink Conrad from Blue George years ago. Blue George had an outstanding unearned revenue related to the Patent amounting to…
- On July 1, 2020, Blue George Company purchased 25% interest of Pink Conrad for P150,000. Blue George incurred transaction cost equal to 5% on the transaction price. On October 1, 2020, Pink Conrad declared dividends of P80,000. At the end of 2020, Pink Conrad reported net income of P200,000. On January 1, 2021, the fair values of Pink Conrad's net assets were as follows:Current Assets - P100,000;Equipment - P150,000;Patent – P120,000;Land - P50,000;Buildings - P300,000; andLiabilities - P80,000. On January 1, 2021, Blue George Company purchased 50% interest of the Pink Conrad Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. Pink Conrad paid for the legal fees of P10,000 and securities SEC registration of P20,000 which was reimbursed by Blue George. The Patent of Pink Conrad refers to the technology purchased by Pink Conrad from Blue George years ago. Blue George had an outstanding unearned revenue related to the Patent amounting to…On March 1, 2020, Dorsey Corporation purchased Johnson Company. The book and fair value of Johnson's balance sheet accounts is shown below. Record the purchase on Dorsey's books under each of the following independent assumptions. a. Dorsey paid Johnson $1,000,000 b. Dorsey paid Johnson $700,000 Book Value Fair Value Cash 50,000 50,000 Accounts Receivable 90,000 75,000 Inventory 125,000 175,000 Equipment 70,000 100,000 Buildings 75,000 95,000 Land 600,000 700,000 Accounts Payable 200,000 200,000 Note Payable Retained Earnings 100,000 100,000 315,000 315,000 Common Stock 15,000 250,000 Paid in Capital For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). 380,000 380,000DEF Company had acquired the following assets: Purchased Equipment on January 1, 2022 with a list price of P1,500,000 and was acquired with the following terms: Trade discount of 10%; Offered cash discount of 2% (which DEF did not take). o 0 -Purchased Machinery on January 1, 2022 under the following terms: Down payment of P150,000; 0 O Issued a non-interest bearing note payable in annual installments of P105,000 starting December 31, 2022. Total face value of the note was P420,000. The cash price equivalent for the machinery was not available. The incremental borrowing rate of DEF was 8%. PVF of P1 ordinary annuity for 4 periods was 3.31. A building was donated by a wealthy shareholder of DEF Company. At the time of donation, the fair value of the building was P15,000,000. DEF incurred necessary costs amounting to P150,000 in relation to the donated building. The cost of the building to the wealthy shareholder was P10,000,000. 0 REQUIREMENTS: What is the initial cost of the equipment?…
- DEE Inc. purchased an equipment on March 31, 2019. The selling price of the asset is equal to its fair value at ₱1,400,000. The entity acquired the equipment by issuing 1,000 ₱1,000 8% bonds, currently quoted at 103. Provided that the entity is using the SYD method of depreciation, and the equipment’s useful life is five (5) years with a 10% residual value based on its cost, what is the carrying value of the equipment as of December 31, 2020? A. ₱ 535,600 B. ₱ 432,600 C. ₱ 659,200 D. ₱ 370,800On November 1, 2018, Berry Corporation declared equipment as property dividend payable on February 15, 2019. The carrying amount of the equipment is P700,000. Data relating to the fair values of the equipment are as follows: Date Fair value November 1, 2018 600,000 December 31, 2018 800,000 February 15, 2019 760,000 **(assume that the cost to distribute are immaterial) How much is the gain on distribution of property dividends on February 15, 2019 when the dividends were finally distributed?On May 7, 2021, Jimin Corporation sold a tract of land for P70,000 that resulted in a P30,000 gain on the sale. PTD agreed to accept one payment of P35,000 on August 15 and a second payment of P35,000 on December 15. PTD had a calendar year-end. What amount of gain was reported during the second, third, and fourth quarters of the year from this sale?
- On July 1, 2020, Agincourt Inc. made two sales. 1. It sold land having a fair value of $700,000 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,101,460. The land is carried on Agincourt’s books at a cost of $590,000. 2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $400,000 (interest payable annually). Agincourt Inc. recently had to pay 8% interest for money that it borrowed from British National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 12% interest. Instructions Record the two journal entries that should be recorded by Agincourt Inc. for the sales transactions above that took place on July 1, 2020.Korean Short Ribs Company sold a tract of land with carrying amount of P3,000,000 to Instant Pot Corp. on July 1, 2021. P1,200,000 was collected on the date of sale, and the balance of P2,800,000 is collectible in four equal annual installments of P902,500 consisting of principal and 11% interest on the unpaid balance. The first installment is due on July 1, 2022. What amount related to the notes receivable shall be classified as current assets on December 31, 2022? a. P594,500 b. P781,198 c. P659,895 d. P902,500Korean Short Ribs Company sold a tract of land with carrying amount of P3,000,000 to Instant Pot Corp. on July 1, 2021. P1,200,000 was collected on the date of sale, and the balance of P2,800,000 is collectible in four equal annual installments of P902,500 consisting of principal and 11% interest on the unpaid balance. The first installment is due on July 1, 2022. What amount related to the notes receivable shall be classified as current assets on December 31, 2022?