Denber Co. acquired 60% of the common stock of Kailey Corp. on September 30, 2019. For 2019, Kailey reported revenues of $820,000 and expenses of $610,000, (excluding amortization related to the acquisition) all reflected evenly throughout the year, The annual amount of amortization related to this acquisition was $15,000. What is the effect of including Kailey in consolidated net income for 2019? А. 31,250 В. 33,000 C. 48,750 D. 39,350
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- Below are Lebnas Corp.’s 2019 income statement and comparative balance sheet at 12/31/2019 and 12/31/2018. Additional information: On December 31, 2018, Lebnas acquired 25% of Island ’s common stock for $609,000. On that date, the carrying value of Island’s assets and liabilities, which approximated their fair values, was $2,435,000. Island reported income of $319,000 for the year ended December 31, 2019. No dividend income was received by Lebnas on Island’s common stock during the year 2019. During 2018, Lebnas loaned $797,500 to POI , an unrelated company. POI made the first semi-annual principal repayment of $72,500, plus interest at 10%, on December 31, 2018. POI is current on the loan as of December 31, 2019. On January 2, 2019, Lebnas sold equipment costing $145,000, with a carrying amount of $44,950 for cash. On December 31, 2019, Lebnas entered into a finance lease for a new The present value of the annual rental…Denber Co. acquired 60% of the common stock of Kailey Corp. on September 1, 2019. For 2019, Kailey reported revenues of $810,000 and expenses of $630,000, not including its investment in Denber, and all reflected evenly throughout the year. The annual amount of amortization related to this acquisition was $15,000. What is the amount of the noncontrolling interest's share of Kailey's income for 2019? a. $72,000. b. $22,000. c. $66,000. d. $24,000. e. $48,000.1. On January 1, 2019, Blackpink Company acquired a 10% interest in an investee for P3,000,000. The investment was accounted for a fair value through other comprehensive income. The fair value of the investment was P3,500,000 on December 31, 2019. On January 1, 2020, the entity acquired a further 15% interest in the investee for P8,500,000. On such date, the carrying amount of the net assets of the investee was P36,000,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value was P4,000,000 greater than carrying amount. The equipment had a remaining life of 5 years. The investee reported net income of P8,000,000 for 2020 and paid dividend of P5,000,000 on December 31, 2020. What is the carrying amount of the investment in associate on December 31, 2020? 2. picture
- On January 1, 2021, PCO purchased 70% ownership of SCO which resulted to a gain on acquisition of P100,000. Net assets of SCO were fairly valued except for inventory which was understated by P1,500,000. A third of these inventories remained unsold as of the end of the calendar year. The operations of the two companies for 2021 are as follows: In the consolidated statement of comprehensive income for the year ended December 31, 2021, how much is the cost of goods sold? a. 1,550,000 b. 1,850,000 c. 3,550,000 d. 3,250,000During 2019, Subsidiary company, Sim had reported a net income $ 41,600 and declared dividends $ 12,000. The current amortization of acquisition price is $ 3,600. Intercompany sales from Subsidiary to Parent company, during 2019 were $ 2,600. Intercompany profit in ending inventory is $ 2,400 and intercompany profit in beginning inventory $ 1,200. Parent Company Pal had acquired 80% of subsidiary, Sim. What is the share of NCI in Subsidiarys net income for the year 2019? Select one: O a. 7,200 O b. 7,300 O c. 7,360 O d. 7,400Print Inc. acquired 100% of Same Co. in a business combination on September 30, 2019. During 2019, Print declared quarterly dividends of Php25,000 and Same declared quarterly dividends, of Php10,000. Under the purchase method of accounting for the business combination, what amount should be reported as dividends declared in the December 31,2019 consolidated statement of retained earnings? a.100,000 b.105,000 c.130,000 d.140,000
- On January 1, 2020, Jumper Co. acquired all of the common stock of Cable Corp. for $540,000. Annual amortization associated with the acquisition amounted to $1,800. During 2020, Cable recognized net income of $54,000 and paid dividends of $24,000. Cable's net income and dividends for 2021 were $86,000 and $24,000, respectively. Required: Assuming that Jumper decided to use the partial equity method, prepare a schedule to show the balance in the investment account at the end of 2021.On January 1, 2021, PCO purchased 70% ownership of SCO which resulted to a gainon acquisition of P100,000. Net assets of SCO were fairly valued except for inventorywhich was understated by P1,500,000. A third of these inventories remained unsoldas of the end of the calendar year.The operations of the two companies for 2021 are as follows:PCO SCOSales P3,100,000 P2,600,000(COGS) (1,300,000) (1,250,000)Gross profit 1,800,000 1,350,000(OPEX) (200,000) (150,000)1,550,0003,550,0001,850,0003,250,000Other income 0 200,000(Other expenses) (120,000) 0Net income P1,480,000 P 400,000In the consolidated statement of comprehensive income for the year endedDecember 31, 2021, how much is the cost of goods sold? A. 1,550,000B. 3,550,000C. 1,850,000D. 3,250,000 based on the information above, In the consolidated statement of comprehensiveincome for the year ended December 31, 2021, how much is the consolidated netincome attributable to the controlling interest? 1,830,0001,980,0001,760,0001,860,000Vaughn Inc. acquired all of the outstanding common stock of Roberts Co. on January 1, 2020, for $276,000. Annual amortization of $21,000 resulted from this acquisition. Vaughn reported net income of $80,000 in 2020 and $60,000 in 2021 and paid $24,000 in dividends each year. Roberts reported net income of $50,000 in 2020 and $57,000 in 2021 and paid $12,000 in dividends each year. What is the Investment in Roberts Co. balance on Vaughn's books as of December 31, 2021, if the equity method has been applied?
- Frappe Company is acquiring Frappuccino Corporation on January 1, 2020. The cumulative earnings of Frappuccino from 2015 to 2019 amounted to P7,200,000. On January 1, 2020, the assets and liabilities of Frappuccino at appraised values are P10,350,000 and P6,650,000, respectively. The normal return in Frappuccino 's industry is 20%. Goodwill is computed by capitalizing at 25% average earnings in excess of normal return based on appraised value of net assets. What is the amount paid by Frappe in the acquisition of Frappuccino Corporation?A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…Accounting On October 1, 2019, Paul Inc. acquired 80% of Sam Co. by paying $500,000 cash. At that date, Sam reported a Common Stock account balance of $100,000, Additional Paid in Capital balance of $100,000, and Retained Earnings, as of October 1, 2019, of $250,000. On that date, the fair value of Sam Co. was appraised at $600,000. All excess fair value from the acquisition is attributed to an unrecorded Customer List with a 10 year remaining life. Sam Co. earned $85,000 and declared dividends of $30,000 in 2019. Paul Inc. had income of $210,000 through its own operations (i.e., excluding investment income from Sam Co.) in 2019. Assume that earnings and dividends are earned/declared evenly throughout the year. Required: a) Did Paul pay a premium for its shares in Sam? Answer 'yes' or 'no' and show your work. b) Determine the December 31, 2019 Investment in Sam balance, assuming Paul applied the (Full) Equity Method. c) Determine the December 31, 2019 year-end balance of the…