DC Company purchased 100% of the outstanding common shares of FA Company on December 31, 20X3 for $570,000. At that date, FA had $260,000 of outstanding common stock and retained earnings of $200,000. It was agreed that the net assets were fairly valued except that the fair value of the capital assets exceeded their net book value by $36,000 and the carrying value of the inventory exceeded its fair value by $24,000. The capital assets had a remaining useful life of 6 years as of the acquisition date and have no salvage value. Inventory turns over 2 times a year. In the FMV increment amortization elimination entries for the year ended December 31, 20x4, what is the dollar value of the adjustment that should be made to amortization expense for the difference in the capital asset valuation?
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- At the beginning of current year, Cynosure Company purchased 30% of the ordinary shares of another entity for P3,500,000 when the net assets acquired amounted to P7,000,000 At acquisition date, the carrying amounts of the identifiable assets and liabilities of the investee were equal to their fair value, except for equipment for which the fair value was P1,500,000 greater than carrying amount and inventory whose fair value was P500,000 greater than cost. The equipment has a remaining life of 4 years and the inventory was all sold during the current year. The investee reported net income of P4,000,000 and paid P1,000,000 dividends during the current year. Required: 1. Prepare journal entries for the current year. 2. Compute the investment income for the current year.Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fair value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common stock for $97,000. Summarized balance sheets for Split on the dates indicated are as follows: Assets Cash Accounts Receivable Inventory Buildings & Equipment (net) Total Assets Liabilities & Equities Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities & Equities 20X7 $ 49,000 51,000 72,000 370,000 $542,000 December 31 20X8 Balance in investment account $ 79,000 91,000 102,000 350,000 $622,000 20X9 $ 99,000 121,000 162,000 330,000 $712,000 $ 77,000 $127,000 $167,000 105,000 105,000 105,000 155,000 155,000 155,000 205,000 235,000 285,000 $542,000 $622,000 $712,000 Split paid dividends of $22,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and…Picnic Corp. acquired 80% of outstanding shares of Grove Inc. the stock acquisitionresulted to a goodwill of P700,000. The consideration transferred by Picnic Corp. and fair value of net assets of Grove Inc.amounted to P4,200,000 and 4,500,000, respectively. How much is the control premium?a. 100,000b. 200,000c. 1,000,000d. None of the above
- On January 1, 20x8, Bristol Company acquired 80 percent of Animation Company's common stock for $280,000 cash. At that date, Animation reported common stock outstanding of $200,000 and retained earnings of $100,000, and the fair value of the noncontrolling interest was $70,000. The book values and fair values of Animation's assets and liabilities were equal, except for other intangible assets which had a fair value $50,000 greater than book value and an 8-year remaining life. Animation reported the following data for 20x8 and 20x9: Year Comprehensive Income Dividends Paid20x8 $30,000 $5,00020x9 $45,000 $10,000 Bristol reported net income of $100,000 and paid dividends of $30,000 for both the years. What is the amount of consolidated comprehensive income reported for 20x9? What is the amount of comprehensive income attributable to the controlling interest for 20x8? What is the…At the beginning of current year, Cinnamon Company purchased 40% of the ordinary shares of another entity for P3,000,000 when the net assets acquired amounted to P6,000,000.At acquisition date, the carrying amounts of the identifiable assets and liabilities of the investee were equal to their fair value, except for the equipment for which the fair value was P1,500,000 greater than carrying amount and inventory whose fair value was P500,000 greater than cost.The equipment has a remaining life of 4 years and the inventory was all sold during the current year.The investee reported net income of P4,000,000 and paid P1,000,000 dividends during the current year.Required;1. Prepare journal entries for the current year2. compute the investment income for the current year.On January 1, 20x8, Bristol Company acquired 80 percent of Animation Company's common stock for $280,000 cash. At that date, Animation reported common stock outstanding of $200,000 and retained earnings of $100,000, and the fair value of the noncontrolling interest was $70,000. The book values and fair values of Animation's assets and liabilities were equal, except for other intangible assets which had a fair value $50,000 greater than book value and an 8-year remaining life. Animation reported the following data for 20x8 and 20x9: Year Comprehensive Income Dividends Paid20x8 $30,000 $5,00020x9 $45,000 $10,000 Bristol reported net income of $100,000 and paid dividends of $30,000 for both the years. 1. Based on the preceding information, what is the amount of consolidated comprehensive income reported for 20x8? 2. What is the amount of consolidated comprehensive income reported for…
- es Penn Corporation purchased 80 percent ownership of State Company on January 1, 20X2. at underlying book value. At that date, the fair value of the noncontrolling Interest was equal to 20 percent of the book value of State. On January 1, 20X4, Penn sold 2,000 shares of State's stock for $65,000 to Nonaffiliated Company and recorded a $10,000 Increase in additional pald-in capital. Trial balances for the companies on December 31, 20X4, contain the following data: Cash Accounts Receivable Inventory Buildings and Equipment Investment in State Company Cost of Goods Sold Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Connon Stock ($10 par) Additional Paid-In Capital Retained Earnings Sales Income from State Total Penn Corporation Debit $ 36,000 79,000 122,000 660,000 187,200 205,000 20,000 22,000 22,000 Credit State Company Credit Debit $ 41,000 59,000 102,000 270,000 95,000 15,000 26,000 17,000 $167,000 163,000 165,000…RR Corporation acquired 80 percent of the stock of GG Company by issuing shares of its common stock with a fair value of P192,000. At that time, the fair value of non-controlling interest was estimated to be P48,000 and the fair values of its identifiable assets and liabilities were P310,000 and P95,000, respectively. GG’s assets and liabilities had book values of P220,000 and P95,000, respectively. Compute for "Investment in GG" reported by RR to be reported immediately after the combination Additional question: Using the same information above, compute for the increase in identifiable assets of the combined entity immediately after the combination.RR Corporation acquired 80 percent of the stock of GG Company by issuing shares of its common stock with a fair value of P192,000. At that time, the fair value of non-controlling interest was estimated to be P48,000 and the fair values of its identifiable assets and liabilities were P310,000 and P95,000, respectively. GG’s assets and liabilities had book values of P220,000 and P95,000, respectively. REQUIRED: 1. Compute for the increase in identifiable assets of the combined entity immediately after the combination. 2. Compute for the increase in total liabilities of the combined entity immediately after the combination.
- Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At the date of acquisitior fair value of the noncontrolling Interest was equal to 25 percent of Saul's book value. The balance sheets of the two companies fc January 1, 20X1, are as follows: Cash Accounts Receivable. Inventory Buildings and Equipment Less: Accumulated Depreciation Investment in Saul Corporation Total Assets PENNY MANUFACTURING COMPANY Balance Sheet January 1, 20x1 Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Total Assets $ 231,500 Accounts Payable 75,000 Bonds Payable. 113,000 Common Stock 618,000 Additional Paid-In Capital (139,000) Retained Earnings 233,250 $ 1,131,758 Total Liabilities and Equities $ 159,750 380,000 181,000 31,000 380,000 $ 1,131,750 SAUL CORPORATION Balance Sheet January 1, 20x1 $ 61,000 Accounts Payable 115,000 Bonds Payable 193,000 Common Stock ($10 par) 618,000 Additional Paid-In Capital (239,000)…Johannes Inc. acquired 80 percent of Corner Brook Ltd. common shares on January 1, Year 4, for $744,000. At that date, the fair value of the non-controlling Interest was $186,000. Corner Brook's balance sheet contained the following amounts at the time of the combination: Cash Accounts Receivable Inventory Construction Work in Progress Other Assets (net) Total Assets 66,000 140,000 40,000 Accounts Payable $ 106,000 Bonds Payable 610,000 950,000 Common Shares ($10 par value) Retained Earnings 400,000 530,000 450,000 $1,646,000 $ 1,646,000 Total Liabilities & Equities During each of the next three years, Corner Brook reported net income of $120,000 and paid dividends of $60,000. On January 1, Year 6, Johannes sold 8,800 of the Corner Brook shares for $260,000 in cash. Johannes used the equity method in accounting for its ownership of Corner Brook. Required: (a) Compute the balance in the Investment account reported by Johannes on January 1, Year 6, before its sale of shares. (Omit $ sign…Pisa Company acquired 75 percent of Siena Company on January 1, 20X3, for $712,500. The fair value of the noncontrolling interest was equal to 25 percent of book value. On the date of acquisition, Siena had common stock outstanding of $300,000 and a balance in retained earnings of $650,000. During 20X3, Siena purchased inventory for $35,000 and sold it to Pisa for $50,000. Of this amount, Pisa reported $20,000 in ending inventory in 20X3 and later sold it in 20X4. In 20X4, Pisa sold inventory it had purchased for $40,000 to Siena for $60,000. Siena sold $45,000 of this inventory in 20X4. Income and dividend information for Siena for 20X3 and 20X4 are as follows: Year Net Income Dividends 20X3 $ 150,000 $ 40,000 20X4 $ 200,000 $ 50,000 Pisa Company uses the fully adjusted equity method. Required: Present the worksheet consolidation entries necessary to prepare consolidated financial statements for 20X3. Present the worksheet consolidation entries necessary to prepare…