. What is the gain on remeasurement to equity to be recognized for 2021? a. 1,500,000 b. 4,500,000 c. 2,250,000 d. 0 2. What is the goodwill arising from the acquisition on January 1, 2021? a. 2,250,000 b. 1,250,000 c. 1,350,000 d. 350,000 3. What is the carrying amount of the investment in associate on December 31, 2021? a. 11,250,000 b. 11,800,000 c. 12,000,000 d. 14,300,000
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1. What is the gain on remeasurement to equity to be recognized for 2021?
a. 1,500,000
b. 4,500,000
c. 2,250,000
d. 0
2. What is the
a. 2,250,000
b. 1,250,000
c. 1,350,000
d. 350,000
3. What is the carrying amount of the investment in associate on December 31, 2021?
a. 11,250,000
b. 11,800,000
c. 12,000,000
d. 14,300,000
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- 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. pictureOn January 1, 2019, FFF Company acquired a 10% interest in an investee for P3,000,000. The investment was accounted for using the cost method. On January 1, 2020, the entity acquired a further 15% interest in the investee for P6,750,000. On such date, the carrying amount of the net assets of the investee was P36,000,000 and the fair value of the 10% interest was P4,500,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value exceeds carrying amount by P4,000,000. The equipment has a remaining life of 5 years. The investee reported net income of P8,000,000 for 2020 and paid cash dividend of P5,000,000 on December 31, 2020. What is the implied goodwill arising from the acquisition?On January 1, 2021, PUP CAF acquired a 10% interest in an investee for P3,000,000. The investment was accounted for under the cost method. During 2021, the investee reported net income of P4,000,000 and paid dividend of P1,000,000. On January 1, 2021, 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 and the fair value of the 10% existing interest was P3,500,000. 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 2021 and paid dividend of P5,000,000 on December 31, 2021. What total amount of income should be recognized by the investor in 2021
- On January 1, 2019, FFF Company acquired a 10% interest in an investee for P3,000,000. The investment was accounted for using the cost method. On January 1, 2020, the entity acquired a further 15% interest in the investee for P6,750,000. On such date, the carrying amount of the net assets of the investee was P36,000,000 and the fair value of the 10% interest was P4,500,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value exceeds carrying amount by P4,000,000. The equipment has a remaining life of 5 years. The investee reported net income of P8,000,000 for 2020 and paid cash dividend of P5,000,000 on December 31, 2020. What amount of gain on re-measurement to equity should be recognized in 2020?The Investor acquired 75% of Investee on January 1, 2020 for $105, At acquisition the fair value of the noncontrolling interest was $35,000. Trial Balances for the two entities at December 31, 2020 are: Investor Investee Debit Credit Debit Credit Cash 68,500 32,000 Accounts Receivable 85,000 14,000 Inventory 97,000 24,000 Land 42,875 25,000 Buildings & Equipment 350,000 150,000 Investment in Subsidary 118,875 Cost of Goods Sold 145,000 114,000 Wage Expense 35,000 20,000 Depreciation Expense 25,000 10,000 Interest Expense 12,000 4,000 Other Expense 23,000 11,000 Dividends Declared 30,000 20,000 Accumulated Depreciation 170,000 50,000 Accounts…An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct acquisition costs incurred were P140,000. On 31 December 2020 the fair value of the instrument was P1,100,000 and the transaction costs that would be incurred on sale were estimated at P120,000. If the investment is designated as FA@FVTOCI, what gain would be recognized in the financial statements for the year ended 31 December 2020? Group of answer choices A) P420,000 B) P160,000 C) Nil D) P40,000
- An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct acquisition costs incurred were P140,000. On 31 December 2020 the fair value of the instrument was P1,100,000 and the transaction costs that would be incurred on sale were estimated at P120,000. If the investment is designated as FA@FVTOCI, what gain would be recognized in the financial statements for the year ended 31 December 2020? Group of answer choices P40,000 Nil P420,000 P160,000An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct acquisition costs incurred were P140,000. On 31 December 2020 the fair value of the instrument was P1,100,000 and the transaction costs that would be incurred on sale were estimated at P120,000. If the investment is designated as FA@FVTOCI, what gain would be recognized in the financial statements for the year ended 31 December 2020? Nil P420,000 P160,000 P40,000On January 1, 2019, GRANGER Co. acquired 80% interest in HISTORIA, Inc. by issuing 5,000 shares with fair value of P30 per share and par value of P20 per share. The financial statements of GRANGER Co. and HISTORIA, Inc. immediately after the acquisition are shown in the image. On January 1, 2019, the fair value of the assets and liabilities of HISTORIA, Inc. were determined by appraisal, show in the image. The equipment has a remaining useful life as of 4 years from January 1, 2019. Prepare the consolidated statement of financial position as at January 1, 2019. GRANGER Co. elects to measure non-controlling interest as its proportionate share in HISTORIA’s net identifiable assets.
- An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct acquisition costs incurred were P140,000. On 31 December 2020 the fair value of the instrument was P1,100,000 and the transaction costs that would be incurred on sale were estimated at P120,000. If the investment is designated as FA@FVTOCI, what gain would be recognized in the financial statements for the year ended 31 December 2020? A. Nil B. 40,000 C. 160,000 D. 420,000On 1 July 2019, Brad Ltd acquired all assets and liabilities of Pitt Ltd. In exchange for these assets and liabilities, Brad Ltd issued 100,000 shares that at date of issue had a fair value of $5.20 per share. Costs of issuing these shares amounted to $1,000. Legal cost associated with the acquisition of Pitt Ltd amounted to $1,200.The assets and liabilities of Pitt Ltd at 1 July 2019 were as follows:Carrying Amount ($) Fair Value ($)AssetsCash 2,000 2,000Accounts receivable 10,000 10,000Inventory 64,000 68,000Equipment 320,000 232,000Accumulated depn - Equipment (96,000) -Patents 280,000 280,000LiabilitiesAccounts payable (16,000) (16,000)Debentures (64,000) (64,000)Required:a) Prepare the acquisition analysis at 1 July 2019 for the acquisition of Pitt Ltd by Brad Ltd.b) Prepare the journal entries in the records of Brad Ltd at 1 July 2019.On January 3, 2019. Cullumber Company purchased for $505.000 casha 10% interest in Riverbed Corp. (Accounted for as Available- for-Sale Investments). The fair value of Cullumber's investment in Riverbed securities is as follows: December 31, 2019, $565,000, and December 31, 2020, $522,000. On January 2, 2021, Cullumber purchased an additional 30% of Riverbed's stock for $1560,000 cash when the book value of Riverbed's net assets was $4,186,000. The excess was attributable to depreciable assets having a remaining life of 8 years. During 2019, 2020, and 2021. the following occurred. Riverbed Dividends Paid by Net Income Riverbed to Cullumber 2019 $353,000 $15.000 2020 448,000 18,000 2021 549,000 70,000 On the books of Cullumber Company, prepare all journal entries in 2019, 2020, and 2021 that relate to its investment in Riverbed Corp, reflecting the data above and a change from the fair value method to the equity method. (Credit account titles are automatically indented when amount is…