On September 1, FAITH Inc issued 120,000 shares of its P50 par value ordinary share in exchange for land. On the date of the transaction, the fair value of the ordinary shares, evidenced by its quoted market price in the stock exchange, was P120 per share. The fair value of the land on the same date was valued at P10,000,000. The journal entry to record this transaction includes a debit to Land for how much?

On September 1, FAITH Inc issued 120,000 shares of its P50 par value ordinary share in exchange for land. On the date of the transaction, the fair value of the ordinary shares, evidenced by its quoted market price in the stock exchange, was P120 per share. The fair value of the land on the same date was valued at P10,000,000. The journal entry to record this transaction includes a debit to Land for how much?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 1MC

See similar textbooks

Similar questions

On july 16, 2021, Empe exchanged a land for 15,000 ordinary shares of RH corporation to be held for trading. On this date, the carrying amount of the land was P1,200,000 and the fair value was P1,650,000. On this date, the carrying amount of RH's share was P75 and the market value was P125. On October 17, 10,000 of these share were sold at P135. The market price at year end is P142. The entry made by your client with regards to the above investment upon acquisition was: DEBIT: Trading securities-RH-P1,200,000 CREDIT: Land-P1,200,000 Upon sale: DEBIT: Cash-P1,350,000 CREDIT: Trading securities-P1,350,000 What amount should be presented in the statement of financial position on December 31, 2021 for the investment related to RH? Compute the unrealized gain or loss that should be reported in the income statement at yearend. ( If loss, put a negative (-) sign before the numerical figure)
On June 17, the Lattern Company issued 120,000 shares of its $0.10 par value common share in exchange for land. On the date of the transaction, the fair value of the common share, evidenced by its market price, was $10 per share. The journal entry to record this transaction includes ______.
Blue Spruce Corporation purchased 300 common shares of Burke Inc. for $22,830 and accounted for them using FV-OCI. During the year, Burke paid a cash dividend of $3.45 per share. At year end, Burke shares had a fair value of $72.50 per share. (a) Prepare Blue Spruce's journal entry to record the purchase of the investment. (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 O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
On October 17, ORANGE Company issued 15,000 shares of its P100 par ordinary share in acquiring a land that has a fair value of P 1,700,000 during that date. The ordinary share is actively selling at P120 per share. On December 31, the land has a fair value of P2,100,000. At what amount should the Land be recorded in the books of Orange? *
On January 1, 20x4, the Alpha Company entered into a transaction for acquisition of assets and liabilities of Beta Company. Alpha issued P400 in long-term liabilities and 40 shares of ordinary shares having a par value of P1 per share but a fair value of P10 per share. Alpha paid P20 to lawyers, accountants and brokers for assistance in bringing about this purchase. Another P15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Item.. ..Alpha .Beta Cash.. P 180 ..P 40 Accounts Receivable...... 810..180 Inventory... 1,080.. 280 Land. . 600.. 360 Buildings (net).. .1,260.. 440 Equipment (net).. 480... 100 .....- Accounts Payable........( 450)..( 80) Long-term liabilities......(1,290)..( 400) Ordinary Shares, P1 par....( 330) Ordinary Shares, P20 par .( 240) Share Premium.. ( 1,080)..( 340) Retained Earnings.......(1,260).. ( 340) Note: Parentheses indicate a credit balance.
On March 1, ABC Inc acquired equity securities at the market value of P1,200,000. Broker fees of P50,000 were incurred in relation to the purchase. On December 31, the securities had a market value of P1,500,000. Required: a. Determine the amount at which the financial asset should be recognized initially. b. Prepare adjusting entry, if any, on December 31. Assumptions: The securities are classified as At fair value through profit or loss At fair value through other comprehensive income 1. 2.
On September 1, 2019, Pelican Ltd exchanged 10,000 ordinary shares held in treasury for a used machine. The treasury shares were acquired by Pelican at a cost of P40 per share, and are accounted for under the cost method. On the date of the exchange, the ordinary shares had a fair value of P55 per share (the shares were originally issued at P30 per share). As a result of this exchange, Pelican's total equity will increase by P100,000. P400,000. P150,000. P550,000.
On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltdissued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of EldoradoLtd. The costs of issuing the shares by Quick Buck Ltd cost $1,600.At this date the statement of financial position of Eldorado Ltd was as follows: c Carrying amount Fair valueMachinery $40,000 $67,000Fixtures & fittings 60,000 68,000Vehicles 35,000 35,000 Current assets 10,000 12,000Current liabilities (16,000) (18,000)Total net assets…
York Corporation declares a property dividend on June 30, payable in bonds of Laurens Company, which are classified as “available for sale.” The bonds are recorded at a fair value of $58,000 (there is a $0 balance in Allowance for Change in the Value of Investment in Available-for-Sale Securities), but at the time of the property dividend have a current value of $67,000. Prepare the journal entries to record the declaration of this property dividend.
29,000 shares reacquired by Bridgeport Corporation for $55 per share were exchanged for undeveloped land that has an appraised value of $1,808,000. At the time of the exchange, the common stock was trading at $66 per share on an organized exchange. (a) Prepare the journal entry to record the acquisition of land assuming that the purchase of the stock was originally recorded using the cost method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit
North Ltd acquired $100,000 of shares in South Ltd for trading purposes on 1 January 20X3. Transaction costs of $2,000 were incurred. The fair value of the shares at 31 December 20X3 was $120, 500. Choose the account names and calculate the amount that correctly account for this investment on 31 December 20X3 (amount for the credit entry is not required).
At the beginning of the current year, Alexis Company purchase marketable equity securities to be held as “trading” for P5,000,000. The entity also paid transaction cost amounting to P200,000.The securities had a market value of P5,500,000 at year-ended and the transaction cost that would be incurred on the sale is estimated at P100,000. No securities were sold during the current year. Assuming the company has elected irrevocably to measure the investment at FV thru OCI. What amount of unrealized gain or loss on these securities should be reported in the income statement for the current year?