On January 1, 20x1 ABC entered into joint arrangement classified as a joint venture. ABC acquired 50% interest in the joint venture for a total cost of 500,000. In its statement of comprehensive income, the joint venture reported a net profit of 2,000,000 and other comprehensive income 500,000. On Sept 1 20x1 the venture declared cash dividends amounting to 200,000 to all stakeholders to be paid on January 20x2. How much is the balance of the investment in joint venture account of ABC as of Dec 31?

On January 1, 20x1 ABC entered into joint arrangement classified as a joint venture. ABC acquired 50% interest in the joint venture for a total cost of 500,000. In its statement of comprehensive income, the joint venture reported a net profit of 2,000,000 and other comprehensive income 500,000. On Sept 1 20x1 the venture declared cash dividends amounting to 200,000 to all stakeholders to be paid on January 20x2. How much is the balance of the investment in joint venture account of ABC as of Dec 31?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…
On January 1, 20X0, Station invested P2,000,000 cash in a joint venture for 50% interest. For the years ended December 31, 20X0, 20X1, and 20X2, the joint venture reported the following data: Year Net Income (Net Loss) Dividend Distribution 20X0 P1,000,000 P300,000 20X1 (6,000,000) - 20X2 7,000,000 500,000 Determine the following: Share in net loss or investment to be reported by Station for the year ended December 31, 20X1. The book value of Investment in Joint venture to be reported by Station as of December 31, 20X2.
On January 1, 20x1, PATRIMONY Co. entered into a joint arrangement classified as a joint venture. For an investment of ₱2,000,000, PATRIMONY Co. obtained 30% interest in HERITAGE Joint Venture, Inc. During the year, HERITAGE Joint Venture, Inc. reported profit of ₱4,000,000 and other comprehensive income of ₱800,000, i.e., a total comprehensive income of ₱4,800,000. HERITAGE Joint Venture, Inc. declared dividends of ₱2,400,000. How much is the carrying amount of the investment in joint venture on December 31, 20x1?
On January 1, 2013, Regina Company entered into a joint agreement classified as a joint venture. For an investment of P1,000,000, Regina Company obtained 30% interest in Gold Joint Venture, Inc. During the year, Gold Joint Venture, Inc. reported profit of P2,000,000 and other comprehensive income of P400,000. Gold Joint Venture, Inc. declared and paid dividends of P1,200,000 during the year. How much is the carrying amount of the investment on December 31, 2013?
On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…
January 1, 20x1, Peter Corp. acquired the identifiable net assets of Ella Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Peter paid the broker's fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Peter and Ella are P15,200,000 and P2,500,000, respectively, and the book values of liability of Peter and Ella are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Peter is overvalued by P200,000 and non-current asset of Ella Corp is undervalued by P500,000. Peter Corp. has estimated P400,000 representing cost of exiting the activity of Ella Corp such as: cost of terminating employees and the cost of relocating terminated employees of Ella. The agreement also provides that Peter Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which December 31, 20x1, earnings of…
On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…
2. On January 1, 20X0, Station Inc. invested P2,000,000 cash in a joint venture for 50% interest. For the years ended December 31, 20X0, 20X1, and 20X2, the joint venture reported the following data: Net Income (Net Loss) P1,000,000 (6,000,000) 7,000,000 Dividend Distribution P300,000 Year 20X0 20X1 20X2 500,000 Required: Determine the following: a. Share in net loss or investment to be reported by Station Inc. for the year ended December 31, 20X1. b. The book value of Investment in Joint venture to be reported by Station Inc. as of December 31, 20X2.
On January 1, 2018, PNB and Allied Bank entered into a contract of merger wherein PNB will issue 100,000 ordinary shares with par value of P10 and quoted price of P20 to the existing shareholders of Allied in exchange for the net assets of Allied Bank. PNB paid acquisition related cost of business combination amounting to P100,000 and stock issuance cost amounting to P200,000. As of December 31, 2017, PNB has total assets with book value of P50M and fair market value of P60M while Allied Bank has total assets with book value of P5M and fair market value of P4M. The amount net assets of Allied Bank on December 31, 2017 is P2.6M. What is the goodwill/(gain on bargain purchase) arising from business combination? Group of answer choices 400,000 (600,000) 600,000 800,000
On January 1, 2018, PNB and Allied Bank entered into a contract of merger wherein PNB will issue 100,000 ordinary shares with par value of P10 and quoted price of P20 to the existing shareholders of Allied in exchange for the net assets of Allied Bank. PNB paid acquisition related cost of business combination amounting to P100,000 and stock issuance cost amounting to P200,000. As of December 31, 2017, PNB has total assets with book value of P50M and fair market value of P60M while Allied Bank has total assets with book value of P5M and fair market value of P4M. The amount net assets of Allied Bank on December 31, 2017 is P2.6M. What is the amount of total assets of PNB on January 1, 2018 after the merger? Group of answer choices 54,100,000 64,100,000 65,100,000 55,100,000
Gold Ltd purchased Silver on 1 June 2023, acquiring all of the assets and liabilities. The price agreed on was $60, 000, payable $20, 000 in cash and the balance by the issue to Silver Ltd of 16, 000 fully paid shares in Gold Ltd, these shares having a fair value of $2.50 per share. The balances of the two companies accounts as at 1 June 2023 were as follows: Gold Ltd Silver LtdCash 30,000 -Accounts receivable 8,000 20,000Inventory 14,000 26,000Plant (net) 50,000 30,000Government bonds 12,000 -Goodwill - 10,000Total assets 114,000 86,000Accounts payable 2,000 20,000Retained earnings 12,000 (24,000)Share capital 100,000 90,000Total liabilities and equity 114,000 86,000 All the identifiable net assets of Silver Ltd were recorded by Silver Ltd at fair value except for the inventories, which were considered to be worth $28,000. The plant had an expected remaining life of 5 years. Gold Ltd incurred incidental costs of $500 in relation to the acquisition. Costs of issuing shares in Gold Ltd…
North Ltd acquired $100,000 of shares in South Ltd for trading purposes on 1 January 20X3. Transaction costs of $2,000 were incurred. The fair value of the shares at 31 December 20X3 was $120, 500. Choose the account names and calculate the amount that correctly account for this investment on 31 December 20X3 (amount for the credit entry is not required).