How much is the carrying amount of the investment in associate on December 31, 2018?
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1.
On January 1, 2018, Koehn Company bought 25% outstanding ordinary shares of Cosby Company for P1 million. The book value of the net asset acquired was P3 million. The difference was attributable to the fair value of Cosby's machinery exceeding book value. The machinery has a remaining life of 10 years. 0n January 3, 2018, Koehn Company sold an equipment costing P600,000 to Cosby Company for P800,000. The equipment has a remaining life of five years. In 2018, Cosby Company reported net income of P1,000,000. Cash dividends of P100,000 were declared and paid by Cosby Company on December 31, 2018.
How much is the carrying amount of the investment in associate on December 31, 2018?
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- On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.On January 2, 2020, Kent Corp. paid 1,600,000 for the purchase of 40% of the ordinary shares of Kara Company. The statement of financial position of Kara at the date of acquisition shows the following information:Assets subject to depreciation (remaining useful life is 8 years) 2,400,000Assets not subject to depreciation 800,000Liabilties 400,000Both book value and fair value are the same for assets not subject to depreciation and liabilities. The fair market value of Karas assets subject to depreciation is 2,720,000. Kara depreciates its assets using the straight-line method. Karas intangibles are amortized over a 20-year period. Net income for the year ended December 31, 2020, is 640,000. It declares and pays dividends of 500,000 in 2020.What amount of the investment cost is attributable to goodwill? a. 480,000 b. 352,000 c. 608,000 d. 128,000On July 1, 2020, SM acquired 80% of outstanding shares of BDO in exchange for P4M cash and 100,000 preferred shares with par value of P100 and quoted price of P200. On the acquisition date, the net assets of BDO has book value of P39M but a building with remaining useful life of 10 years is overstated by P4M. On October 1, 2020, BDO sold an equipment to SM at a gain of P200,000. On the date of sale, the equipment has remaining life of 5 years. On October 1, 2020, SM rented a space to BDO at a monthly rental of P50,000. For the year ended December 31, 2020, BDO reported net income of P900,000 and declared dividends of P100,000 on December 30, 2020. On the other hand, SM reported net income of P2M on its separate income statement and declared dividends of P1,000,000. On the separate financial statements of SM, the retained earnings on December 31, 2019 is P10,000,000 while its stockholders equity is P25,000,000. SM accounted its Investment in BDO in its separate financial statements…
- Tomato co. Purchased 40% of MU corp. On april 1,2017, for 500,000 when MU's book value was 1,260,000. On the date of acquisition, the market value of MU's net asset equaled their book values, except for the following: •MU's equipment has a fair value of 50,000 less than it's books value. The equip. Has a remaining useful life of 10 years. •MU's building has a fair value of 40,000 more than it's book value. The building has a remaining useful life of 20 years. MU's results of operation for 2017 and 2018 are as follows: •2017 net income 150,000 •2018 net loss 30,000 MU's cash dividends of 20,000 and 10,000 respectively for 2017 and 2018. Required: journal entries and balances for the following 1. Investment income 2017 2. Investment loss 2018 3. Investment Carrying value for 2017 and 2018On January 1, 2022, P Company purchased 64,000 shares of the 80,000 outstanding shares of S Company at a price of P1,200,000, with an excess of P30,000 over the book value of S Company's net assets. P13,000 of the excess is attributed to an undervalued equipment with a remaining useful life of eight years from the date of acquisition and the rest of the amount is attributed to goodwill. For the year 2022, P Company reported a net income of P750,000 and paid dividends of P180,000, while S Company reported a net income of P240,000 and paid dividends to P Company amounting to P39,000. The retained earnings of P Company at the end of 2022 per books is P1,025,000. P Company uses the cost method to account for its investment in S Company and elected to measure non-controlling interest at fair value on date of acquisition. How much is the consolidated net income attributable to controlling interests?On January 1, 2018, Panorama Company acquired 80% of Scann Corporation for $6,400,000.At the time of the acquisition, the book value of Scann's assets and liabilities was equal to the fair value except for equipment that was undervalued $80,000 with a four-year remaining useful life and inventories that were undervalued $20,000 and sold in 2018. Panorama separate net income in 2018 and 2019 was $1,100,000 and $1,150,000, respectively. Scann separate net income in 2018 and 2019 was $300,000 and $360,000, respectively. Dividend payments by Scann in 2018 and 2019 were $60,000 and $60,000, respectively Required: Using equity method, Calculate Investment in Scann shown on Panorama's ledger at December 31, 2018 and 2019. Calculate Investment in Scann shown on the consolidated statements at December 31, 2018 and 2019. Calculate consolidated net income for 2018 and 2019. Calculate Noncontrolling interest balance on Panorama's ledger at December 31, 2018 and 2019. Calculate Noncontrolling…
- On January 1, 2018, Panorama Company acquired 80% of Scann Corporation for $6,400,000.At the time of the acquisition, the book value of Scann's assets and liabilities was equal to the fair value except for equipment that was undervalued $80,000 with a four-year remaining useful life and inventories that were undervalued $20,000 and sold in 2018. Panorama separate net income in 2018 and 2019 was $1,100,000 and $1,150,000, respectively. Scann separate net income in 2018 and 2019 was $300,000 and $360,000, respectively. Dividend payments by Scann in 2018 and 2019 were $60,000 and $60,000, respectively Required: Using equity method, 1) Calculate Investment in Scann shown on Panorama's ledger at December 31, 2018 and 2019.2) Calculate Investment in Scann shown on the consolidated statements at December 31, 2018 and 2019.3) Calculate consolidated net income for 2018 and 2019.4) Calculate Noncontrolling interest balance on Panorama's ledger at December 31, 2018 and 2019.5) Calculate…On January 1, 2018, Panorama Company acquired 80% of Scann Corporation for $6,400,000.At the time of the acquisition, the book value of Scann's assets and liabilities was equal to the fair value except for equipment that was undervalued $80,000 with a four-year remaining useful life and inventories that were undervalued $20,000 and sold in 2018. Panorama separate net income in 2018 and 2019 was $1,100,000 and $1,150,000, respectively. Scann separate net income in 2018 and 2019 was $300,000 and $360,000, respectively. Dividend payments by Scann in 2018 and 2019 were $60,000 and $60,000, respectively Required: Using equity method, 1) Calculate Investment in Scann shown on Panorama's ledger at December 31, 2018 and 2019.2) Calculate Investment in Scann shown on the consolidated statements at December 31, 2018 and 2019.3) Calculate consolidated net income for 2018 and 2019.4) Calculate Noncontrolling interest balance on Panorama's ledger at December 31, 2018 and 2019.5) Calculate…On January 1, 2025, John Paul Jones Corp. purchased 30% of Sky Tech Inc. for $45 million. This acquisition gave John Paul Jones significant influence over Sky Tech. At the date of acquisition, the book value of Sky Tech's net assets was $75 million and their fair value was $90 million. The difference was attributed to the fair value of equipment exceeding book value, and the remaining useful life of this equipment was 5 years. For 2025, Sky Tech reported a net income of $75 million and declared and paid $20 million in dividends. Relative to its investment in Sky Tech, the amount of investment income reported by John Paul Jones Corp. on it’s year end December 31, 2025 income statement is: $6 million. $16.5 million. $22.5 million. $21.6 million. The total amount that John Paul Jones Corp. would report for its investment in Sky Tech Inc. on itsDecember 31, 2025 balance sheet is: $67.5 million. $61.5 million. $60.6 million. $66.6 million. Assume John Paul cannot exercise significant…
- On January 2, 2021, E Company acquired 20% of the outstanding ordinary shares of T Company for P700,000.00. This investment gave E Company the ability to exercise significant influence over T Company. The book value of the acquired shares was P600,000.00. The excess of cost over book value was attributed to a depreciable asset which was undervalued on T Company's balance sheet and which had ten years useful life remaining. For the year ended December 31, 2021, T Company reported net income after tax of P180,000.00 and paid cash dividends of P60,000.00 on its ordinary. Income tax rate is 32%. How much is the carrying value of E Company's investment in T Company at December 31, 2021? P678,000.00 P690,000.00 P714,000.00 P717,200.00On January 1, 2020, P Company purchased 32,000 shares of the 40,000 outstanding shares of S Company at a price of P1,2000,000 with an excess of P30,000 over the book value of S Company’s net assets. P13,000 of the excess is attributed to an undervalued equipment with a remaining useful life of eight years from the date of acquisition and the rest of the amount is attributed to goodwill. For the year 2020, P Company reported a net income of P750,000 and paid dividends of P180,000. While S Company reported a net income of P240,000 and paid dividends to P Company amounting to P39,000. Goodwill has not impaired in 2020. The retained earnings of P Company at the end of 2020 per books is P1,025,000. P Company uses the cost method to account for its investment in S Company. Non-controlling interest is measured at fair market value.What is the non-controlling interest in net assets?a. 339,875b. 337,925c. 334,525d. 336,475Prime Corp acquired 90% of the outstanding ordinary share of Bee Company. On March 31, 2030, Prime sold equipment to Bee Company costing P150,000, with accumulated depreciation of P30,000 for P100,000. The remaining useful life of the equipment is four years. On September 30, 2030, Bee sold machinery with carrying amount of P200,000 for P240,000. The remaining useful life of the machine is five years. On December 31, 2030, Prime and Bee reported net income from their own operation amounting to P1,000,000 and P600,000, respectively. Bee also paid dividend of P200,000. What is the amount of Investment income under equity method for 2030? Group of answer choices 524,633 516,625 522,050 520,425
