01) Jack acquired 80% of the voting equity shares of Jill. Jill had thefollowing equity at the date of acquisition.Ordinary share $1Retained Earnings$1,000,000Select one:O a. $420,000b. $60,000O c. $300,000O d. $48,000800,000The cost of the investment was $1,500,000 and the fair value of thenon-controlling interest at acquisition was $360,000.What was the goodwill on acquisition of Jill?

When one company buys another, the intangible asset known as goodwill is acquired. It denotes a…

Answered: 01) Jack acquired 80% of the voting…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter18: Corporations: Organization And Capital Structure

Section: Chapter Questions

Problem 1BCRQ

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1.Sterne acquired 60% of the voting equity shares of Defoe. Defoe had the following equity at the date of acquisition: $ Ordinary shares $1 500,000 Retained earnings 250,000 The cost of the investment was $850,000 and the fair value of the non-controlling interest at acquisition was $120,000. What was the goodwill on acquisition of Defoe? a. $100,000 b. $132,000 c. $520,000 d. $220,000
Bob acquired 80% of the voting equity shares of Bil Bil had the following equity at the date of acquisition Ordinary shares $1 Retained earnings Your currently accepted answer: 1,000,000 800,000 1,800,000 The cost of the investment was $1,500,000 and the fair value of the non-controlling interest at acquisition was $360,000 What was the goodwill on acquisition of Bill?
2. ABC Corporation holds ordinary shares of XYZ Inc. acquired as follows: Date of Acquisition Shares Total Cost September 19, Year 2 750 60,000 July 16, Year 1 1,250 110,000 The shares above were classified as equity investments at fair value through other comprehensive income. Fair values on December 31, Year 1 and Year 2 were P 85 and P 90 respectively. In Year 3, ABC Corp. Received 2,000 rights to purchase XYZ Inc. ordinary shares at P 80 per share. Five rights are required to purchase one share. ABC Corp. used rights to purchase additional 300 shares of XYZ Inc when each shares sells at P 100. Subsequently ABC sold the remaining rights at 4.50 each. At December 31, Year 3. XYZ Inc ordinary shares sell at P 98. Required:a) Determine the amount of the equity account Unrealized Gains or Losses on Equity Investments at Fair Value through Other Comprehensive Income at the end of the Years 1 and 2.b) Determine the amount taken to other comprehensive income as a result of the…
1. Breakspear Co purchased 600,000 of the voting equity shares of Fleet Co when the value of the non-controlling interest in Fleet Co is £150,000. The following information relates to Fleet at the acquisition date. At acquisition £'000 Share capital, £0.5 ordinary shares Retained earnings Revaluation surplus The goodwill arising on acquisition is £70,000. What was the consideration paid by Breakspear Co for the investment in Fleet Co? 500 150 50 700 a) £420,000 b) £770,000 c) £620,000 d) £570,000 K
1. On January 1, 20x1, Entity A acquires 30% interest in Entity B d. Entity A should not apply the equity method. amount of the investment in associate on December 31, 20x2? interest in Entity B. Entity B reports profit of 94M for the amount of the investment in associate on December 31, 20x1? dividends of P50,000 in 20x1. How much is the carrying P200,000 and declares no dividends. What is the carrying 2. Entity A uses the equity method in accounting for its 20% period. Entity B has outstanding 5% cumulative preference for P600,000. Entity B reports profit of P200,000 and declares of P300,000 at year-end. In 20x2, Entity B reports loss of PAS 28 319 ned to exist a. 550,000 b. 590,000 c. 600,000 d. 640,000 vestee. vestee. avestee. stee's board c. 645,000 Under this ce is initially 600,000 a. d. 630,000 b. 660,000 ement e investor's nges in chares with an aggregate par value of P10M. Entity A holds none of the preference shares. Entity B did not declare dividends on the preference…
Company X acquired 100% of the voting shares of Company Y for $137,500 on 1/1/2022. The fair value of the net assets of Company Y at the date of acquisition was $150,000. This is an example of a(n): Select one: O O FELIC a. revaluation adjustment b. bargain purchase c. extraordinary loss d. positive differential id
Avenues bought land, buildings and equipment by issuing shares. The estimated fair value of the assets are: land: $1,200,000; buildings, $1,500,000 and equipment $300,000. Avenues issues 200,000 shares fora price of $5 each. The par value of each share is $2. The amount of the Share Premium Is Select one: O a. $1,200,000 O b. $600,000 Oc. $800,000 O d. None of the these answers Oe. $900,000
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PROBLEM IV. On January 2, 2019, Klaus Company (qualified as SME) acquired 80% interest in Marcel Company for P4,125,000 cash. On this date, the outstanding ordinary share capital and accumulated profits of Klaus Company and Marcel Company are as follows: Klaus Marcel Ordinary share capital P 2,250,000 P 1,312,000 Share premium 1,750,000 Accumulated profits (losses) 5,520,000 3,187,500 There was no issuance of ordinary shares during the year. Fair value of the following assets of Marcel exceeded their book values as follows: Inventories, P210,000; Property and equipment (useful life, 10 years), P127,500. All other assets and liabilities are fairly valued. On December 31, 2019, the two companies reported the following operating results: Klaus Marcel Net income P 1,825,000 P 975,000 Dividends paid 525,000 262,500 1. Consolidated shareholders' equity reported in the consolidated statement of financial position on 12/31/19
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Gant Company purchased 30 percent of the outstanding shares of Temp Company for $76,000 on January 1, 20X6. The following results are reported for Temp Company: Net income Dividends paid Fair value of shares held by Gant: January 1 December 31 a. Carries the investment at fair value. b. Uses the equity method. Required A Required B 20X6 $ 47,000 14,000 Required: Gant Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in Temp at the end of each year assuming that Gant uses the following options in accounting for its investment in Temp: Complete this question by entering your answers in the tabs below. Income from investment Balance in investment 76,000 95,000 20X6 20X7 $ 42,000 30,000 95,000 92,000 20X7
3. What is the carrying amount of the investment in of the outstanding ordinary shares of Free Company for P5,000,000 cash. Cyber Company accounts for this investment At the date of acquisition, Free Company's net assets had a excess of carrying amount. The land was sold during the Free Company owned land with a fair value of P1,000,000 in At the beginning of current year, Cyber Company bought 30% Problem 17-16 (IAA) by the equity method. carrying amount of P12,000,000. a current year. The remaining difference between the purchase price and ihe carrying amount of the underlying equity cannot be attributed to any identifiable tangible or intangible asset. Accordingly, the remaining difference is allocated to goodwill. Free Company reported net income of P6,000,000 and paid cash dividend of P1,500,000 during the current year. 1. What is the implied goodwill from the acquisition? a. 1,400,000 b. 1,000,000 с. 1,100,000 d. 2. What amount should be reported as investment income for the…

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