Anti Corp. purchased 10,000 shares of Pro Corp. at P60 per share. The shares represent less than 5% ownership in Pro Corp. The shares are classified at fair value through profit or loss. Fair value at December 31, Year 1 was P66. At the beginning of Year 2, Pro Corp. issued rights to purchase one ordinary share for every five rights submitted plus P50. Immediately after the rights were issued, the ordinary share was selling for P70 per share. REQUIRED: (a) Assume that all the rights were sold at the market price of P5. Give the entry to record this sale. (b) Assume that Anti Corp. exercised all the rights, when the market price of each Pro Corporation ordinary was P75. Give the entry to record the exercise of the rights and the valuation entry at year-end, assuming that each share of Pro Corporation sells at P78 at December 31

Anti Corp. purchased 10,000 shares of Pro Corp. at P60 per share. The shares represent less than 5% ownership in Pro Corp. The shares are classified at fair value through profit or loss. Fair value at December 31, Year 1 was P66. At the beginning of Year 2, Pro Corp. issued rights to purchase one ordinary share for every five rights submitted plus P50. Immediately after the rights were issued, the ordinary share was selling for P70 per share. REQUIRED: (a) Assume that all the rights were sold at the market price of P5. Give the entry to record this sale. (b) Assume that Anti Corp. exercised all the rights, when the market price of each Pro Corporation ordinary was P75. Give the entry to record the exercise of the rights and the valuation entry at year-end, assuming that each share of Pro Corporation sells at P78 at December 31

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

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 1MC

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On January 1 of the current year, Philips Company, an investor, held 10,000 shares of Sunshine Company, acquired at a total cost of P1,980,000. On October 1 of the current year, Sunshine Company issued rights to subscribe to new stock at P165 per share in the ratio of one share for every five rights held. The share has market value of P209 and the right has a market value of P11 at the time of issuance. Philips Company did not account for the stock rights spearately and subsequently exercise all stock rights during the current year. What amount should be reported by Philips as an investment in Supremes Company at the end of the current year?
Anti corp. purchased 10,000 shares of Pro Corp. at P60 per share. The shares represent less than 5% ownership in Pro Corp. The shares are classified as financial assets at fair value through profit or loss. Fair value at December 31, Year 1 was P66. At the beginning of Year 2, Pro Corp issued rights to purchase one ordinary share for every five rights submitted plus P50. Immediately after the rights were issued, the ordinary share was selling for P70 per share. (A) Assume that all the rights were sold at the market price of P5. Give the entry to record this sale(B) Assume that Anti Corp. exercise all the rights, when the market price of each Pro Corporation ordinary was P75. Give the entry to record the exercise of the right and the valuation entry at year-end, assuming that each share of Pro Corporation sells at P78 at December 31.
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On January 2, year 1, ABC Company purchased 75% of XYZ's outstanding common stock. On that date, the fair value of the 25% noncontrolling interest was $35,000. During year 1, XYZ had net income of $20,000. Selected balance sheet data at December 31, year 1, is as follows: ABC (Column 1), XYZ (Column 2) During year 1, ABC and XYZ paid cash dividends of $25,000 and $5,000, respectively, to their shareholders. There were no other intercompany transactions. In its December 31, year 1 consolidated statement of retained earnings. REQUIRED: 1. In ABC's December 31, year 1, consolidated balance sheet, what amount should be reported as noncontrolling interest in net assets?
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