On April 1, 2018, Gangnam Company purchased 25,000 ordinary shares of Psy Inc. at an amount that reflected book value as of that date. At the time of purchase, Psy Inc. had 100,000 ordinary shares outstanding. Gangnam had no ownership interest in Wings before the purchase. The first quarter statement ending March 31, 2018, of Psy Inc. had a profit of P480,000. For the year ended December 31, 2018, Psy Inc. reported a profit of P2,400,000. Psy Inc. paid Ganam dividends of P60,000 on June 1 and P80,000 on December 31, 2018. The carrying amount of the investment in Psy Inc. on December 31, 2018, is P4,840,000. What was Chicken Company’s acquisition cost of its investment in Wings Company on April 1, 2018?

On April 1, 2018, Gangnam Company purchased 25,000 ordinary shares of Psy Inc. at an amount that reflected book value as of that date. At the time of purchase, Psy Inc. had 100,000 ordinary shares outstanding. Gangnam had no ownership interest in Wings before the purchase. The first quarter statement ending March 31, 2018, of Psy Inc. had a profit of P480,000. For the year ended December 31, 2018, Psy Inc. reported a profit of P2,400,000. Psy Inc. paid Ganam dividends of P60,000 on June 1 and P80,000 on December 31, 2018. The carrying amount of the investment in Psy Inc. on December 31, 2018, is P4,840,000. What was Chicken Company’s acquisition cost of its investment in Wings Company on April 1, 2018?

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

See similar textbooks

Similar questions

On April 1, 2019, Tagaytay Company purchased 25,000 ordinary shares of Sulo Co. at P180 per share, a price that approximates book value as of that date. At the time of the purchase, Sulo had 100,000 ordinary shares outstanding. Tagaytay had no ownership interest in Sulo before the purchase. The first quarter statement ending March 31, 2019 of Sulo recorded earnings of P480,000. For the year ended December 31, 2019, Sulo reported profit of P2,400,000. Sulo paid Tagaytay dividends of P60,000 on June 1 and again P60,000 on December 31, 2019. During 2020, Sulo reported profit of P2,000,000 and paid dividends of P2,000,000 to its shareholders. On January 1, 2021, Tagaytay sold 10,000 ordinary shares of Sulo for P200 per share. For the year ended December 31, 2021, the reported profit of Sulo was P2,500,000 and dividends of P60,000 were paid to Tagaytay. The market value of Sulo shares remained unchanged during the year 2021. How much is the gain of Tagaytay Company on the sale of 10,000…
On April 1, 2019, Star Company purchased 30,000 ordinary shares of Moon Company at P180 per share, a price that approximates book value as of that date. At the time of the purchase, Moon had 100,000 ordinary shares outstanding. Star had no ownership interest in Moon before the purchase. The first quarter statement ending March 31, 2019 of Moon recorded earnings of P500,000. For the year remaining 9 months of 2019, Moon reported profit of P2,800,000. White paid Star dividends of P80,000 on June 1 and again P70,000 on December 31, 2019. During 2020, Moon reported profit of P2,000,000 and paid dividends of P2,000,000 to jits shareholders. On January 1, 2021, Star sold 10,000 ordinary shares of Moon for P220 per share. For the year ended December 31, 2021, the reported profit of Moon was P2,500,000 and dividends of P60,000 were paid to Star. The market value of Moon shares remained unchanged during the year 2021. Q: The carrying value of Star Company's investment in Moon on December…
On April 1, 2019, Star Company purchased 30,000 ordinary shares of Moon Company at P180 per share, a price that approximates book value as of that date. At the time of the purchase, Moon had 100,000 ordinary shares outstanding. Star had no ownership interest in Moon before the purchase. The first quarter statement ending March 31, 2019 of Moon recorded earnings of P500,000. For the year remaining 9 months of 2019, Moon reported profit of P2,800,000. White paid Star dividends of P80,000 on June 1 and again P70,000 on December 31, 2019. During 2020, Moon reported profit of P2,000,000 and paid dividends of P2,000,000 to jits shareholders. On January 1, 2021, Star sold 10,000 ordinary shares of Moon for P220 per share. For the year ended December 31, 2021, the reported profit of Moon was P2,500,000 and dividends of P60,000 were paid to Star. The market value of Moon shares remained unchanged during the year 2021. Refer to Star Company. The carrying value of Star Company's investment in…
On April 1, 2020, Car Company purchased 25,000 ordinary shares of Way Company at an amount which reflected book value as of that date. At the time of purchase, Way had 100,000 ordinary shares outstanding. Car had no ownership interest in Way before the purchase. The first quarter statement ending March 31, 2020 of Way had profit of P480,000. For the year ended December 31, 2020, Way reported profit of P2,400,000. Way paid Car dividends of P50,000 on June 1 and P80,000 on December 31, 2018. The carrying amount of the investment in Way at December 31, 2020 is P4,840,000.What was Car's acquisition cost of its investment in Way on April 1.2020? a. P4,360,000 b. P4,500,000 c. P4,840,000 d. P5,180,000
On April 1, 2019, Star Company purchased 30,000 ordinary shares of Moon Company at P180 per share, a price that approximates book value as of that date. At the time of the purchase, Moon had 100,000 ordinary shares outstanding. Star had no ownership interest in Moon before the purchase. The first quarter statement ending March 31, 2019 of Moon recorded earnings of P500,000. For the year remaining 9 months of 2019, Moon reported profit of P2,800,000. White paid Star dividends of P80,000 on June 1 and again P70,000 on December 31, 2019. During 2020, Moon reported profit of P2,000,000 and paid dividends of P2,000,000 to jits shareholders. On January 1, 2021, Star sold 10,000 ordinary shares of Moon for P220 per share. For the year ended December 31, 2021, the reported profit of Moon was P2,500,000 and dividends of P60,000 were paid to Star. The market value of Moon shares remained unchanged during the year 2021. Refer to Star Company. The gain of Star Company on the sale of 10,000…
Toy Co Corporation purchased 282,000 of the 940,000 common shares of Abacus Ltd. on October 1, 2021, at $2.10 per share. Near the end of the fourth quarter ended on December 29th, Abacus declared dividends on its common shares of $74,000 but the dividend payment date is not until 2022. Abacus also announced that it had net income for the quarter ended December 31, 2021, of $188,000.Record the journal entries that Toy Co would make during the last quarter ended December 31, 2021, under the following assumptions: Toy Co does not have significant influence over Abacus and uses the cost model to account for this investment. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Please donot provide solution in image format provide solution in step by step format with fast solution
. Min Hyun Jing Ltd. purchased 21,600 common shares of Glastone Ltd. on January 1, 2018, when the market price was $27.50 per share. This gave Min Hyun Jing 12% of the shares issued by Glastone Ltd. Min Hyun Jing Ltd. has a December 31 year end. For the year ended December 31, 2018, Glastone reported net income of $260,000 and declared dividends of $1.10 per share on December 31. The trading price of Glastone’s shares on that date was $31.20. For the year ended December 31, 2019. Glastone reported net income of $280,000 and declared dividends of $1.15 per share on December 31. The trading price of Glastone’s shares on December 31 was 34.60. Min Hyun Jing Ltd. purchased an additional 20,000 common shares on this date. For the year ended December 31, 2020, Glastone reported a net loss of $80,000, but still declared dividends on December 31, in the amount of $0.75 per share. The trading price of Glastone’s shares on December 31, 2019 was $30.50 per share. For the year ended…
On July 1, 2017, Entity H acquired 25% of the shares of Oki, Inc. for P1,000,000. At the date, the equity of Oki was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Oki during 2017 to 2021: YEAR PROFIT(LOSS) 2017 P200,000 2018 (2,000,000) 2019 (2,500,000) 2020 160,000 2021 300,000 How much share of profit of assocaiate should Entity H report in its 2020 profit or loss? a.Nil b. P40,000 c. P60,000 d. P100,000
On October 1, 2019, Michael Company purchased 30,000 shares of Jackson Company at P180 per share that reflected book value as of that date. At the time of the purchase, Jackson had 100,000 ordinary shares outstanding. Michael had no ownership interest in Jackson before the purchase. The nine months ending September 30, 2019 of Jackson recorded profit of P2,960,000. For the year ended December 31, 2019, Jackson reported profit of P4,800,000. Jackson paid Michael dividends of P120,000 on December 31, 2019.For the year 2020. Jackson reported profit of P2,800,000 and paid dividends of P 1,700,000 to its ordinary shareholders.On January 2, 2021, Michael sold 20,000 ordinary shares of Jackson for P250 per share. For year ended December 31, 2021, the reported profit of Jackson was P4,000,000 and dividends of P40,000 was paid to Michael. Market value of the remaining shares at this time is P2,300,000.What Is the investment carrying value at December 31. 2020? a. P6,162,000 b. P5,970,000…
On October 1, 2019, Michael Company purchased 30,000 shares of Jackson Company at P180 per share that reflected book value as of that date. At the time of the purchase, Jackson had 100,000 ordinary shares outstanding. Michael had no ownership interest in Jackson before the purchase. The nine months ending September 30, 2019 of Jackson recorded profit of P2,960,000. For the year ended December 31, 2019, Jackson reported profit of P4,800,000. Jackson paid Michael dividends of P120,000 on December 31, 2019.For the year 2020. Jackson reported profit of P2,800,000 and paid dividends of P 1,700,000 to its ordinary shareholders.On January 2, 2021, Michael sold 20,000 ordinary shares of Jackson for P250 per share. For year ended December 31, 2021, the reported profit of Jackson was P4,000,000 and dividends of P40,000 was paid to Michael. Market value of the remaining shares at this time is P2,300,000. What Is the amount at which the investment is reported on the statement of financial position…
On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? O P1.060.000 Cr. O No entry O P40,000 Dr. O P1.035.000 Cr.
On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? P1,035,000 Cr. P1,060,000 Cr. P40,000 Dr. No entry How much will the Investment in Associate account be debited/credited in 2019? P960,000 Cr. No Entry P15,000 Dr. P75,000 Dr.