On January 2, 2020, Tuao Company purchased 10% of Abulug Company's outstanding ordinary shares for P20,000,000. Tua is the largest single shareholder in Abulug and this gives Tuao the power to participate in the financial and operating policy decisions of the Abulug but is not control or joint control over those policies. Abulug reported profit of P10,000,000 and paid dividend of P4,000,000.
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- On January 2, 2020, Tuao Company purchased 10% of Abulug Company’s outstanding ordinary shares for P20,000,000. Tuao is the largest single shareholder in Abulug and this gives Tuao the power to participate in the financial and operating policy decisions of the Abulug but is not control or joint control over those policies. Abulug reported profit of P10,000,000 and paid dividend of P4,000,000. What should be the balance in Tuao’s investment in Abulug Company at the end of 2020? P21,000,000 P21,400,000 P20,600,000 P20,000,000On January 2, 2020. Tuao Company purchased 10% of Abulug Company's outstanding ordinary shares for P20.000.000. Tuao is the largest single shareholder in Abulug and this gives Tuao the power to participate in the financial and operating policy decisions of the Abulug but is not control or joint control over those policies. Abulug reported profit of P10,000,000 and paid dividend of P4,000,000. What should be the balance in Tuao's investment in Abulug Company at the end of 2020? A. 21,000,000 B. 20,000,000 C. 21,400,000 D. 20,600,000On 1 July 2020, Lada Ltd (LL) acquired a 20 per cent interest in Hupmobile Ltd (HL) for a cash consideration of $40,000. Despite its small shareholding in HL, LL is considered to have significant influence over HL, since LL is able to appoint a director to HL’s Board of Directors, and HL is a major customer of LL. LL also provides management personnel to HL, and the two companies share technical information. On the date of the acquisition, the assets of HL were reported at fair value. The share capital and reserves of HL at the date of acquisition were: Share capital 50,000 Retained earnings 140,000 Total shareholders’ equity $190,000 Additional information For the year ending 30 June 2021, HL recorded an after-tax profit of $100,000, from which it paid a dividend of $50,000. For the year ending 30 June 2022, HL recorded an after-tax profit of $80,000, from which it paid a dividend of $60,000. On 30 June 2022, HL revalued its Land upwards by $10,000. Before this revaluation, the Land…
- On December 31, 2020, Naengmyeon Company, an entity with no subsidiary, purchased 10,000 ordinary shares from Bibim Corp. at P150 per share. At the time of purchase, Bibim has an outstanding 50,000 shares with a total shareholders’ equity of P7,500,000. For the year 2021, Bibim reported a profit of P3,000,000. On December 30, 2021, Naengmyeon received a cash dividend of P50 per share. What is the carrying value of the investment at December 31, 2021? a. P1,600,000 b. P2,100,000 c. P1,500,000 d. P2,600,0008. On January 2, 2020, Tuao Company purchased 10% of Abulug Company’s outstanding ordinary shares for P20,000,000. Tuao is the largest single shareholder in Abulug and this gives Tuao the power to participate in the financial and operating policy decisions of the Abulug but is not control or joint control over those policies. Abulug reported profit of P10,000,000 and paid dividend of P4,000,000. What should be the balance in Tuao’s investment in Abulug Company at the end of 2020? Group of answer choices P20,000,000 P21,000,000 P21,400,000 P20,600,000North Land Company acquired 30,000 shares of the ordinary share of Shaver Corp. in July 2021. This acquisition gave North Land Company significant influence over Shaver Corp. On December 2021, Shaver announced a P100,000 net income for 2021 and declared a cash dividend of P.50 per share on its 100,000 shares of outstanding ordinary share. How much dividend income will North Land Company recognize in its Statement of Profit or Loss?
- On January 1, 2021, Belgium Company purchased 20% of Russia Company's outstanding ordinary shares for P4,000,000. Belgium Company is the largest single shareholder in Russia Company and Russia Company's officers are a majority on Belgium Company's board of directors. Russia, for the year, reported a net income of P8,000,000 and paid dividends of P3,000,000. How much is the Investment in associate on December 31, 2021?On January 1, 2020, Elite Company paid P 18,000,000 for 50,000 ordinary shares of Craze Company which represent a 25% interest in the in the net assets of Craze. The acquisition cost is equal to the carrying amount of the net assets acquired. Elite has the ability to exercise significant influence over Craze. Elite received a dividend of P35 per share from Craze in 2020. Craze reported net income of P9,600,000 for the year ended December 31, 2020. In the December 31, 2020 statement of financial position, what amount should be reported as investmentin Craze Company?a. 22,150,000b. 20,400,000c. 18,650,000d. 18,000,000P 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 shares
- On June 1, 2020, SME A acquired 35% of the equity of entities X, Y, Z for P64,000 and P58,000 and P37,000, respectively, SME A has joint control over the strategic financial and operating decisions of entities X, Y and Z. Transaction costs of 5% of the purchase price of the shares were incurred by SME A. On December 31, 2020, Entity X declared dividends of P9,000 and Entity Y, P15,000 for the year 2020. These dividends are to be paid by X and Y in 2021. Entity Z declared and paid a dividend of P24,000 for the year ended 2020. For the year ended December, 31, 2020, entities X and Y recognized loss of P30,000 and P42,000. respectively. However, entity Z recognized a profit of P18,000 for that year. Published price quotations do not exist for the shares of X, Y and Z. Using appropriate valuation techniques, SME A determined the fair values of their investments in entities X, Y and Z at December 31, 2020 as P60,000, P65,000, and P49,000, respectively. Costs to sell are estimated at 9% of…On July 15, 2021, Max Co. acquired 25,000 shares of Chicken Co. for P250,000 which includes P1 cash dividend per share to shareholders of record as of July 30, 2021. Max Co does not have significant influence over Chicken Co. The entity also spent additional P5,000 transaction cost. The dividend was received by Max Co. on August 15, 2021. On November 15, 2021, the Max Co. sold 10,000 shares for P10.5/share. At year- end, Chicken Co.'s shares were selling at P12 per share. How much will be reported as FVPL securities at December 31, 2021?(Use the PFRS for SMEs) On December 31, 2021, Taher Co. acquired 30% of the ordinary shares that carry voting rights of entity B for P100,000. Taher Co. incurred transaction costs of P1,000 in acquiring these shares. Taher Co. has significant influence over entity B. Taher Co. uses the cost model to account for its investments in associates. In January 2022, entity B declared and paid a dividend of P20,000 out of profits earned in 2021. No further dividends were paid in 2022, 2023 or 2024. A published price quotation does not exist for entity B. At December 31, 2021, 2022 and 2023, in accordance with Section 27 Impairment of Assets, management assessed the fair values of its investment in entity B as P102,000, P110,000 and P90,000 respectively. Costs to sell are estimated at P4,000 throughout. Taher Co. measures its investment in entity B on December 31, 2021 at? Taher Co. measures its investment in entity B on December 31, 2022 at? The facts are the same as in the immediately…