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
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- On January 1, 2021, PARKSOOYOUNG acquired all the outstanding shares ofSUNGJAE for P600,000. The shareholders’ equity of SUNGJAE on this dateamounted to P600,000. The net assets of SUNGJAE on this day were fairly valuedexcept for inventories which were overstated by P50,000, equipment which wasunderstated by P75,000, and building which was overstated by P125,000. Only half ofthe inventories were sold during 2021. The useful lives of the equipment and thebuilding at the beginning of 2021 were 3 years and 5 years remaining, respectively.On December 31, 2021, the statements of financial position of PARKSOOYOUNGand SUNGJAE are as follows:PARKSOOYOUNG SUNGJAECash 300,000 300,000Inventory 400,000 250,000Equipment 1,000,000 900,000Building 600,000 500,000Liabilities 1,100,000 500,000Share capital 600,000 600,000Retained earnings 600,000 850,000How much is the consolidated total assets as of December 31, 2021? A. 4,125,000B. 4,250,000C. 4,150,0004, D. 275,000On January 1, 2021, PARKSOOYOUNG acquired all the outstanding shares of SUNGJAE for P600,000. The shareholders’ equity of SUNGJAE on this date amounted to P600,000. The net assets of SUNGJAE on this day were fairly valued except for inventories which were overstated by P50,000, equipment which was understated by P75,000, and building which was overstated by P125,000. Only half of the inventories were sold during 2021. The useful lives of the equipment and the building at the beginning of 2021 were 3 years and 5 years remaining, respectively. On December 31, 2021, the statements of financial position of PARKSOOYOUNG and SUNGJAE are as follows: PARKSOOYOUNG SUNGJAE Cash 300,000 300,000 Inventory 400,000 250,000 Equipment 1,000,000 900,000 Building 600,000 500,000 Liabilities 1,100,000 500,000 Share capital 600,000 600,000 Retained earnings 600,000 850,000 How much is the consolidated total…On January 1, 2021, PARKSOOYOUNG acquired all the outstanding shares of SUNGJAE for P600,000. The shareholders’ equity of SUNGJAE on this date amounted to P600,000. The net assets of SUNGJAE on this day were fairly valued except for inventories which were overstated by P50,000, equipment which was understated by P75,000, and building which was overstated by P125,000. Only half of the inventories were sold during 2021. The useful lives of the equipment and the building at the beginning of 2021 were 3 years and 5 years remaining, respectively. On December 31, 2021, the statements of financial position of PARKSOOYOUNG and SUNGJAE are as follows: How much is the consolidated total assets as of December 31, 2021? a. 4,250,000 b. 4,125,000 c. 4,275,000 d. 4,150,000
- 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 youP Company acquired all the outstanding shares of S Company by issuing 50,000 shares with a par value of P100 on July 1, 2021. P's ordinary shares were selling at P102 per share at the date of acquisition. On the same date, the net asset of S had a carrying value and fair value of P3,800,000 and P4,500,000 respectively. Out of pocket expenses of the business combination were as follows (see image below). How much is the amount charged to expense? Legal fees for contract of business combination Audit fees for SEC registration of share issue Brokerage fee Accountant fee for pre-acquisition audit Printing and registration of stock certificates Other direct costs of acquisition 41,200 50,000 22,500 35,000 10,000 16,800 General administrative costs 25,000 12,100 Listing fees in issuing new sharesOn 1 July 2021, James Ltd acquired all the issued shares of Dean Ltd for $350,000. At this date, the financial statements of Dean Ltd showed the following: $ Share capital 270,000 Retained earnings 26,500 General Reserve 8,800 Total equity 305,300 Goodwill 25,000 At acquisition date, all the net identifiable assets and liabilities in Dean Ltd were recorded at amounts equal to their fair value except for: Asset Carrying amount ($) Fair Value ($) Inventories 15,000 18,000 Plant (cost $400,000) 210,000 220,000 The Plant was calculated to have a further life of 5 years, and was depreciated on a straight-line basis. All inventory was sold by 30 June 2020. Assume 30% tax rate Required: Prepare the acquisition analysis at 1 July 2021. Prepare the consolidation entries at acquisition date, 1 July 2021. Include narrations for each entry. Prepare the consolidation worksheet as at 1 July 2021. Prepare a Balance sheet for the reporting Group, James Ltd as at 1 July 2021 in narrative format.
- 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, 2020, HULK CORP. acquired 70% of outstanding ordinary shares of HALL INC. at a price of P210,000. On the same date, the net assets of HALL INC. were reported at P260,000. On January 1, 2020 HULK reported retained earnings of P2,000,000 while HALL reported retained earnings of P200,000. All of the assets and liabilities of HALL are fairly valued except machinery which is undervalued by P80,000 and in inventory which is overvalued by P10,000. The said machinery has a remaining useful life of four years while 40% of the said inventory remained unsold at the end of 2020. For the year ended December 31, 2020, HULK reported net income of P1,000000 and declared dividends of P150,000 in the separate financial statements while HALL reported net income of P150,000 and declared dividends of P20,000 in the separate financial statements. HULK accounted the investment in HALL using cost method in the separate financial statements. 3. What is the non-controlling interest in net assets…
- On 1 July 2021, King Ltd acquired all the share capital of Queen Ltd for $1,800,000, and on that date Queen Ltd.'s equity were as follows: Share capital $1,200,000; Revaluation surplus $500,000 and Retained earnings $200,000. All the assets and liabilities of Queen Ltd. were recorded at fair value on 1 July 2021. During the financial year 2022, the following intragroup transactions occurred between King Ltd and Queen Ltd: Queen Ltd sold land to King Ltd for $400,000, which was $100,000 above cost. The land was still hold by King Ltd. King Ltd sold an equipment to Queen Ltd for $400,000. The carrying amount of equipment to King Ltd of $320,000. Both entities depreciate equipment at a rate of 10% p.a. on cost. Queen Ltd sold inventories costing $160,000 to King Ltd for $180,000. 1/4th of the inventories were still on hand with King Ltd. King Ltd received $15,000 of service revenue from Queen Ltd. Queen Ltd paid dividend of $30,000 and interest on loan of $8,000 to King Ltd. The tax rate…On January 2, 2022, Promenade Company purchased 25% of Twilight Company's ordinary shares; no goodwill resulted from the purchase. Promenade appropriately carries this investment at equity and the balance in Twilight's investment account was P3,800,000 at December 31, 2022. Twilight reported net income of P2,400,000 for the year and paid dividends amounting to P960,000 during 2022. How much did Promenade pay for its investment in Twilight?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
