The following are the combined statements of income and retained earnings for the affiliated companies for the year ended December 31, 2015. PETRON P 1,200,000 48,000 500,000 400,000 P 348,000 780,000 150,000 P 978,000 SHELL P 700,000 Sales Dividend income Cost of sales 250,000 252,000 P 198,000 P 400,000 60,000 P 538,000 Expenses Net income Retained earnings, January 1 Dividends paid Retained earnings, December 31 28. How much total depreciable assets will be reported in the consolidated balance sheet at January 1, 2015? P1,030,000 P900,900 c. P909,000 d. P900,090 а. b. 29. How much equity will be attributable to (1) owners of PETRON Enterprises and (2) the non-controlling interest of SHELL Corporation in the consolidated balance sheet at January 1, 2015? (1) P1,830,000 and (2) P198,000 (1) P1,380,000 and (2) P189,000 (1) P1,830,000 and (2) P189,000 (1) P1,308,000 and (2) P198,000 a. b. C. d. 30. How much is the goodwill or (negative goodwill/IFA) upon the acquisition of SHELL COMPANY by PETRON CORPORATION? P (53,000) P 35,000 с. Р (35,000) d. P P30,500 а. b.
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- On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At the 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 shoes the profits and losses made by Marcus during 2015 to 2019: Year 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? A. 1,060,000 Cr B. No entry C. 40,000 Dr D. 1,035,000 CrSmith Company is acquired by Roan Corporation on July 1, 2015. Roan exchanges 60,000 shares of its $1 par stock, with a fair valueof $18 per share, for the net assets of Smith Company.Roan incurs the following costs as a result of this transaction:Acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25,000Stock registration and issuance costs. . . . . . . . . . . . . . . 10,000Total costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $35,000The balance sheet of Smyth Company, on the day of the acquisition, is in the attachment: The appraised fair values as of July 1, 2015, is as follows:Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $270,000Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220,000Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,000Buildings . .…On January 1, 2016, Prima Company issued 1,500 of its $20 par value common shares with a fair value of $50 per share in exchange for 2,000 outstanding common shares of Swatch Company in a purchase transaction. Registration costs amounted to $1,700 paid in cash. Just prior to the acquisition, the balance sheets of the two companies were as follows: Prima Swatch Cash $ 73,000 $13,000 Accounts Receivable (net) 95,000 19,000 Inventory 58,000 25,000 Plant and Equipment (net) 95,000 43,000 Land 26,000 20,000 Total Assets $ 347,000 $ 120,000 Accounts Payable $ 66,000 16,000 Notes Payable 82,000 21,000 Common Stock, $20 par value 100,000 40,000 Other Contributed Capital 60,000 24,000 Retained Earnings 39,000 19,000 Total Liabilities and Equities…
- On January 1, 2016, Irbid Corporation acquired 90% of Jerash Company's voting stock, at underlying book value. At that date, the fair value of Jerash's net asset was equal to book value. Irbid uses the equity method in accounting for its ownership of Jerash. On December 31, 2016, the trial balances of the two companies are as follows: Irbid Corp. Debit $ 225,500 300,000 144,000 30,000 180,000 40,000 Jerash Comp. Debit $145,000 225,000 Credit Credit Current assets Fixed assets Investment in Jerash co. Depreciation expense Other expense Dividend 25,000 85,000 10,000 Accumulated depreciation Current liabilities Long-term debt Capital stock Retained earnings sales Income from subsidiary Total $150,000 45,000 75,000 100,000 282,500 253,500 13,500 $919,500 $100,000 20,000 90,000 75,000 80,000 125,000 $919,500 | $490,000 $490,000 Required: 1. Provide all eliminating entries needed for consolidation as of December 31, 2016. 2. Prepare a consolidation workpaper for Irbid and Jerash co. as of…On July 1, 2016, Roland Company exchanged 18,000 of its $45 fair value ($1 par value) shares for all the outstanding shares of Downes Company. Roland paid acquisition costs of $40,000. The two companies had the following balance sheets on July 1, 2016: (see attachment)The following fair values applied to Downes’s assets:Other current assets . . . . . . . . . . . $ 70,000Inventory . . . . . . . . . . . . . . . . . . . 80,000Land. . . . . . . . . . . . . . . . . . . . . . . 90,000Building . . . . . . . . . . . . . . . . . . . . 150,000Equipment . . . . . . . . . . . . . . . . . . 100,0001. Record the investment in Downes Company and any other entry necessitated by the purchase.2. Prepare the value analysis and the determination and distribution of excess schedule.3. Prepare a consolidated balance sheet for July 1, 2016, immediately subsequent to the purchase.On January 1, 2011, Plank Company purchased 80% of the outstanding capital stock of Scoba Company for $52,300. At that time, Scoba’s stockholders’ equity consisted of capital stock, $54,300; other contributed capital, $5,000; and retained earnings, $4,100. On December 31, 2015, the two companies’ trial balances were as follows: Plank Scoba Cash $41,800 $22,000 Accounts Receivable 21,000 17,100 Inventory 14,900 8,100 Investment in Scoba Company 68,940 —0— Land 52,800 47,000 Dividends Declared 9,900 7,760 Cost of Goods Sold 85,400 19,900 Other Expense 10,200 12,100 $304,940 $133,960 Accounts Payable $ 11,900 $ 6,000 Other Liabilities 4,900 4,000 Common Stock 101,500 54,300 Other Contributed Capital 19,600 5,000 Retained Earnings, 1/1 49,400 15,200 Sales 103,672 49,460 Equity in Subsidiary Income 13,968 —0— $304,940 $133,960 The accounts payable of Scoba…
- 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: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? a. P1,035,000 Cr. b. No entry c. P40,000 Dr. d. P1,060,000 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.
- 1. On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets andliabilities of Ana Company. Sara issued P400 in long-term liabilities and 40 shares of common stockhaving a par value of P1 per share but a fair value of P10 per share. Sara paid P20 to lawyers,accountants and brokers for assistance in bringing about this purchase. Another P15 was paid inconnection with stock issuance costs. Prior to these transactions, the balance sheets for the twocompanies were as follows: Sara AnaCash P180 P 40Accounts receivable 810 180Inventory 1,080 280Land 600 360Buildings (net) 1,260 440Equipment (net) 480 100Accounts Payable ( 450) ( 80)Long-term liabilities (1,290) (400)Common stock, P1 par (330)Common stock, P20 par (240)Additional paid-in capital (1,080) (340)Retained earnings (1,260) (340)In Sara’s appraisal of Ana, three assets were deemed to be undervalued in the books of Ana: Inventoryby P10, Land by P40 and Buildings by P60.1. If the transaction is…1. On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets andliabilities of Ana Company. Sara issued P400 in long-term liabilities and 40 shares of common stockhaving a par value of P1 per share but a fair value of P10 per share. Sara paid P20 to lawyers,accountants and brokers for assistance in bringing about this purchase. Another P15 was paid inconnection with stock issuance costs. Prior to these transactions, the balance sheets for the twocompanies were as follows: Sara AnaCash P180 P 40Accounts receivable 810 180Inventory 1,080 280Land 600 360Buildings (net) 1,260 440Equipment (net) 480 100Accounts Payable ( 450) ( 80)Long-term liabilities (1,290) (400)Common stock, P1 par (330)Common stock, P20 par (240)Additional paid-in capital (1,080) (340)Retained earnings (1,260) (340)In Sara’s appraisal of Ana, three assets were deemed to be undervalued in the books of Ana: Inventoryby P10, Land by P40 and Buildings by P60.2. Compute the amount of…On January 1, 2013, Peach Company issued 1,390 of its $20 par value common shares with a fair value of $62 per share in exchange for the 1,820 outstanding common shares of Swartz Company in a purchase transaction. Registration costs amounted to $1,752, paid in cash. Just prior to the acquisition, the balance sheets of the two companies were as follows: Peach Company Swartz Company Cash $71,250 $13,190 Accounts receivable (net) 99,260 20,070 Inventory 63,300 26,980 Plant and equipment (net) 99,340 39,970 Land 27,990 21,440 Total assets $361,140 $121,650 Accounts payable $64,130 $16,800 Notes payable 85,460 20,800 Common stock, $20 par value 108,400 36,400 Other contributed capital 58,280 23,800 Retained earnings 44,870 23,850 Total equities $361,140 $121,650 Any difference between the book value of equity and the value implied by the purchase price relates to goodwill.…