Soprano Co. purchased a 90% interest in the Tenor Co. on January 1, 2020 for P600,000. Any excess of cost is attributed to goodwill. The equity balances of Tenor are as follows: 1/1/2020 12/31/2023 Common stock, P10 par 100,000 120,000 Paid in excess of par 200,000 260,000 Retained earnings 250,000 400,000 The only change in paid in capital is a result of a 20% stock dividend paid in 2022. The cost of equity conversion to bring the investment account to its December 31, 2023 balance is? ○ 135,000 ○ 114,000 ○ 207,000 ○ 162,000
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- On July 1, 2019, GAR Company acquired 800,000 shares of FAR Company at a price of P13 per share. GAR estimated that the price paid include P1.50 premium in order to gain control over FAR Company. On this date, the fair values of FAR Company’s identifiable assets and liabilities and their carrying values are given below: Book Value Fair ValueCurrent assets P2,000,000 P2,000,000Property, plant and equipment 9,000,000 11,000,000Liabilities P3,000,000 Ordinary shares, P5 par 5,000,000 Retained earnings 3,000,000 Determine the amount of goodwill assuming the non-controlling interest is measured at the proportionate share in the net assets:Atlas Company purchased the following investments during 2020: Classification Cost Market Value December 31, 2020 Security A Trading 900,000 1,000,000 Security B Trading 1,000,000 1,600,000 On July 31, 2021, the entity sold all of the shares of Security B for P1,100,000. On December 31. 2021, the shares of Security A had a market value of P600,000. No other activity occurred during 2021 in relation to the trading security portfolio. 14. What total loss on the trading securities should be reported in the income statement for 2021? a. 400,000 c. 500,000 b. 900,000 d. 100,000PLEASE PROVIDE SOLUTIONOn January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shares with a market price of P45 per share. The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for the following: Merchandise inventory’s fair value is lower than the book balance by 150,000. Equipment-A, with 2 years remaining useful life, costing P300,000 is understated by P50,000. Land with a fair value of P500,000 is recognized in the books amounting to P350,000. The following events happened to Luna Corp. Equipment-A was sold in June 30, 2023 for P320,000. 60% of merchandise inventory were sold in 2022. There is no movement as to the ordinary shares of Luna Corp during the year. The unadjusted trial balance as of December 31, 2022 were as follows: Lucas Company Luna Corp Cash 2,240,000 1,800,000 Trade…
- Luxemburg Company purchased the following investments during 2021: Initial Cost Transaction cost Fair value Year-end 2021 Security A P180,000 P5,000 P170,000 Security B 150,000 2,500 120,500 On July 31, 2022, the entity sold all of the shares of Security B for P125,800. On December 31, 2022, the shares of Security A had a fair value of P205,000. No other activity occurred during 2022 concerning the portfolio. Retained earnings before any adjustments on equity securities on December 31, 2022, is P975,000. Assuming nontrading securities, how much is the Retained earnings on December 31, 2022?Anthem Co. acquired 60% of the outstanding shares of Bethel Co. on January 2, 2021. Anthem Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of Anthem Co. and Bethel Co. for 2022 are as follows: Anthem Co. Bethel Co. Net Sales P875,000 P350,000 Cost of Sales 525,000 210,000 Gross Profit 350,000 140,000 Operating Expenses 105,000 52,500 Operating Income 245,000 87,500 Dividend Income 56,000 0 Net Income P301,000 P87,500 Bethel Co. made sales to Anthem Co. of P112,000 in 2021 and P168,000 in 2022. Anthem Co. reported inventory on December 31, 2021 amounting to P70,000 of which 20% comes from Bethel Co. and inventory on December 31, 2022 amounting to P84,000 of which 30% comes from Bethel Co. Anthem Co. made sales to Bethel Co. of P273,000 in 2021 and P338,000 in 2022. Bethel reported inventory coming from Anthem Co. as of December 31, 2021 and December 31,…A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
- A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
- ABC acquired 70% of EFG on June 30, 2021. Based on EFG's acquisition-date fair value on intangible of P300,000 was recognized and is being amortized at the rate of P10,000 per year. The 2022 financial statementFre as follows: АВС EFG Sales Cost of goods sold Operating Expenses Dividend Income Net Income 800,000 600,000 (400,000) (100,000) (535,000) (100,000) 35,000 200,000 100,000 Retained Earnings, beg Net Income Dividend Paid 1,300,000 200,000 850,000 100,000 (50,000) 900,000 Retained Earnings, end (100,000) 1,400,000 Cash and Receivables 300,000 700,000 Inventory Investment in EFG Fixed Assets Accumulated Depreciation Totals 400,000 298,000 902,000 1,000,000 (300,000) 2,300,000 600,000 (200,000) 1,400,000 Labilities Ordinary Share Accumulated Profit | Totals 400,000 100,000 600,000 300,000 1,400,000 2,300,000 900,000 1,400,000 EFG sold ABC inventory costing P72,000 during the last six months of 2021 for P120,000. At year-end 30% remained. EFG sells ABC inventory costing P200,000…Anthem Co. acquired 60% of the outstanding shares of Bethel Co. onJanuary 2, 2021. Anthem Co. acquired it at book value which is the sameas its fair value at the date of acquisition. Income Statement of AnthemCo. and Bethel Co. for 2022 are as follows:Anthem Co.Net Sales P875,000Cost of Sales 525,000Gross Profit 350,000Operating Expenses 105,000Operating Income 245,000Dividend Income 56,000Net Income P301,000Bethel Co. made sales to Anthem Co. of P112,000 in 2021 andP168,000 in 2022.Anthem Co. reported inventory on December 31, 2021 amounting toP70,000 of which 20% comes from Bethel Co. and inventory onDecember 31, 2022 amounting to P84,000 of which 30% comes fromBethel Co.Anthem Co. made sales to Bethel Co. of P273,000 in 2021 andP338,000 in 2022.Bethel reported inventory coming from Anthem Co. as of December31, 2021 and December 31, 2022 in the amount of P54,600 andP152,100, respectively.Anthem Co. uses 30% mark-up on cost and Bethel Co. uses 25%mark-up on cost for their selling…On January 1, 2021, PCO purchased 70% ownership of SCO which resulted to a gainon acquisition of P100,000. Net assets of SCO were fairly valued except for inventorywhich was understated by P1,500,000. A third of these inventories remained unsoldas of the end of the calendar year.The operations of the two companies for 2021 are as follows:PCO SCOSales P3,100,000 P2,600,000(COGS) (1,300,000) (1,250,000)Gross profit 1,800,000 1,350,000(OPEX) (200,000) (150,000)1,550,0003,550,0001,850,0003,250,000Other income 0 200,000(Other expenses) (120,000) 0Net income P1,480,000 P 400,000In the consolidated statement of comprehensive income for the year endedDecember 31, 2021, how much is the cost of goods sold? A. 1,550,000B. 3,550,000C. 1,850,000D. 3,250,000 based on the information above, In the consolidated statement of comprehensiveincome for the year ended December 31, 2021, how much is the consolidated netincome attributable to the controlling interest? 1,830,0001,980,0001,760,0001,860,000