the amount paid, how much is attributable to goodwill?
Q: On January 1, 2021, Alamar Corporation acquired a 41 percent interest in Burks, Inc., for $233,000.…
A: Given: % investment is 41% Amount = $233,000 Net income = $82,000 Cash dividend paid = $28,000
Q: Matthew, Inc., owns 30 percent of the outstanding stock of Lindman Company and has the ability to…
A: (A) amount of equity method income would Matthew recognize in 2021 from its ownership interest in…
Q: BuyCo, Inc., holds 21 percent of the outstanding shares of Marqueen Company and appropriately…
A: As per the equity method, the value of the investment is recognized at cost, and that value is…
Q: At the beginning of 2018, Esterlina Corporation purchased 40% of the ordinary shares outstanding of…
A: At beginning of 2018, Esterline purchased ordinary shares of Mary Grace = 40% Purchase consideration…
Q: Jimin, Inc. purchased 40% of Hope Inc.’s outstanding ordinary shares on January 2, 2021, for…
A: Investment in an associate is calculated by the following equation:- Investment in associate =…
Q: On January 1, 2021, Jimin Co. acquired 30,000 ordinary shares out of the 100,000 outstanding shares…
A: Associate company is the company where a company acquire 20-50% of the equity share capital of…
Q: On January 1, 2020, Stellar Co. purchased 23,000 shares (a 10% interest) in Elton John Corp. for…
A: Inter group company accounting deals with accounting of related entities such as subsidiaries, etc.
Q: BuyCo, Inc., holds 24 percent of the outstanding shares of Marqueen Company and appropriately…
A: Equity investee means any Person in which the company or any subsidiary holds an ownership interest…
Q: What amount should Justine Company report as investment in associate on December 31, 2020?
A: Justine Company, an SME, bought 20% of another entity’s ordinary shares on January 1, 2020 for…
Q: Legan, Inc., acquired 10 percent of Barta Corporation on January 1, 2017, for $186,000 and…
A: Journal entries are used to record various accounting transactions which was done by the business…
Q: On August 31, 2020, SG Corporation (SME) purchased all the net assets of Popsters Corporation by…
A: The capitalized cost of the investment is P2,949,000.
Q: On February 28, 2022, P Corp. purchased 80% of S Co's P10 par ordinary shares for P986,000. On this…
A: Given information, Net income =P354,000 Dividends=P112,000 Inventory overvalued =P15,000 Increase in…
Q: On January 1, 2021, Cameron Inc. bought 20% of the outstanding common stock of Lake Construction…
A: 1.
Q: On January 1, 2021, Marshall Company acquired 100 percent of the outstanding common stock of Tucker…
A: Consolidation Statement- Consolidated financial statement refers to the financial statement of an…
Q: At the beginning of 2018, Esterlina Corporation purchased 40% of the ordinary shares outstanding of…
A: SOLUTION- AT THE BEGINNING OF 2018, ESTERLINA CORPORATION PURCHASED ORDINARY SHARES OF MARY GRACE…
Q: Harper, Inc., acquires 40 percent of the outstanding voting stock of Kinman Company on January 1,…
A: Journal entry is a record of financial transactions in the books of accounts of a business. It…
Q: On January 1, 2021, Marshall Company acquired 100 percent of the outstanding common stock of Tucker…
A: Introduction: A consolidated balance sheet is prepared that reveals a major company´s financial…
Q: On April 1, 2021, BBC Co. acquired a 30% stake in LTI Inc. for $ 100,000. This amount includes $…
A: Consolidated Income Statement: It can be referred to as an income statement prepared by the parent…
Q: On January 1, 2021, Jimin Co. acquired 30,000 ordinary shares out of the 100,000 outstanding shares…
A: On 01.01.2021, Jimin Co. acquired ordinary shares of HYBE Inc. = 30000 shares Outstanding shares of…
Q: On January 1, 2018, Johnsonville Enterprises, Inc., acquired 80 percent of Stayer Company’s…
A: Net income: Net income is the excess amount of revenue after deducting all the expenses of a…
Q: On January 1, 2016, Plymouth Corporation acquired 80 percent of the outstanding voting stock of…
A: a.
Q: On January 2, 2021, X Co. acquired all the ordinary share of Y Co. for P2,060,000. On that date, Y…
A: Goodwill is calculated when Purchase consideration paid to acquire a company (acquiree) is greater…
Q: On January 1, 2021, Marshall Company acquired 100 percent of the outstanding common stock of Tucker…
A: The question is based on the concept of Financial Accounting.
Q: On July 1, 2019, CaviteCorporation purchased 40% of the outstanding ordinary shares of another…
A: Outstanding ordinary shares = P500,000 Net assets of investee = P1,000,000 Fair Value greater than…
Q: BuyCo, Inc., holds 28 percent of the outstanding shares of Marqueen Company and appropriately…
A: The equity method is the one that is applied when a company has 20% to 50% of stock ownership…
Q: On January 1, 2021, Sledge had common stock of $280,000 and retained earnings of $420,000. During…
A: Journal entry is the process of documenting commercial transactions for the first time in the books…
Q: On March 1, 2017, Mindoro Company purchased 40% of the outstanding ordinary shares of Garapal…
A: Fair value of investment is the price of the asset on which buyer is interested to purchase and…
Q: On March 1, 2017, Mindoro Company purchased 40% of the outstanding ordinary shares of Garapal…
A: Investment: It is an asset or item which is purchased and held to generate income or for…
Q: Corporation by transferring cash of P500,000 and issuing 40,000 ordinary shares with par value of…
A: A cost involved in the acquisition of ownership in the entity for long-term benifits to the entity.…
Q: Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2020, for $195,000 and…
A: Journal entries refers to the process of systematic documentation of the financial transactions of a…
Q: On August 31, 2020, SG Corporation (SME) purchased all the net assets of Popsters Corporation by…
A: Purchase consideration = Cash paid + fair value of shares + consulting fees + listing fee
Q: On January 2, 2021, Normal Inc. acquired 15% interest in Laco Co. by paying P1,500,000 for 7,500…
A: The investment income to be reported is equal to the total amount received from the company as a…
Q: On January 1, 2020, Culver Co. purchased 24,000 shares (a 10% interest) in Elton John Corp. for…
A: As Culver co. holding 30% of equity in john co. and can exercise significance influence ,equity…
Q: On January 1, 2021, Pancake Co. bought 250,000 ordinary shares of House Co. for P3,000,000,…
A: The impairment loss is the loss due to a decline in the value of an asset. It is determined by…
Q: On January 1, 2021, PARKSOOYOUNG acquired all the outstanding shares of SUNGJAE for P600,000. The…
A: An asset refers to the resources that are generally used for generating the cash flows that help in…
Q: BuyCo, Inc., holds 20 percent of the outstanding shares of Marqueen Company and appropriately…
A: The stock that a company's investors own on the open market is referred to as outstanding shares.…
Q: On August 1, 2020, Whispering Corporation purchased 20% of the outstanding voting shares in WLT…
A:
Q: On January 2, 2021, Normal Inc. acquired 15% interest in Laco Co. by paying P1,500,000 for 7,500…
A: GIVEN On January 2, 2021. Normal Inc. acquired 15% interest in Laco Co. by paying P1.500.000 for…
Q: On January 1, 2021, Alamar Corporation acquired a 42 percent interest in Burks, Inc., for $185,000.…
A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…
Q: BuyCo, Inc., holds 23 percent of the outstanding shares of Marqueen Company and appropriately…
A: Part 1:
Q: On July 1, 2021, Gupta Corporation bought 30% of the outstanding common stock of VB Company for $170…
A: The investment by equity method refers to the accounting method in which assets are recognized at a…
Q: On January 1, 2018, Johnsonville Enterprises, Inc., acquired 80 percent of Stayer Company’s…
A: Net income: Net income is the excess amount of revenue after deducting all the expenses of a…
Q: Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2020, by issuing…
A: A business combination is a transaction in which a buyer takes over control of another company (the…
Q: On January 1, 2018, Cameron Inc. bought 20% of the outstanding common stock of Lake Construction…
A: 1.Journal entries--year 2018
Q: On January 1, 2021, PARKSOOYOUNG acquired all the outstanding shares of SUNGJAE for P600,000. The…
A: In the context of the given question, we should compute the goodwill or gain from the acquisition of…
Q: On December 31, Phoenix Corporation acquired all of Sedona Corporation’s voting stock in exchange…
A: In the above question we have given data of two companies on the basis this we have to calculate…
Q: At the beginning of current year, Cinnamon Company purchased 40% of the ordinary shares of another…
A: Acquisition by a company shares of another entity is known as the acquisition of business or…
Q: On January 1, 2021, PARKSOOYOUNG acquired all the outstanding shares of SUNGJAE for P600,000. The…
A: Merger refers to the process under which the two separate organizations forms a new organization.…
Q: On January 1, 2021, Alamar Corporation acquired a 36 percent interest in Burks, Inc., for $218,000.…
A: Share in income = net income x holding % = 76000*36% = $27,360
Jimin, Inc. purchased 40% of Hope Inc.’s outstanding ordinary shares on January 2, 2021, for $270,000,000. Jimin obtained significant influence over Jimin. The book value of Hope's net assets at the purchase date totalled $450,000,000. Book values and fair values were the same for all financial statement items except for inventory and buildings, for which fair values exceeded book values by $12,500,000 and $112,500,000, All inventories on hand at the purchase date was sold during 2021. The buildings have average remaining useful lives of 15 years. Hope, Inc. reported net income of $110,000,000 for the year ended December 31, 2021, and paid cash dividends of $50,000,000. The fair value of Jimin, Inc.’s investment in associate was $300,000,000 at December 31, 2021.
Of the amount paid, how much is attributable to
Step by step
Solved in 2 steps with 1 images
- Jimin, Inc. purchased 40% of Hope Inc.’s outstanding ordinary shares on January 2, 2021, for P270,000,000. Jimin obtained significant influence over Hope. The book value of Jimin's net assets at the purchase date totalled $450,000,000. Book values and fair values were the same for all financial statement items except for inventory and buildings, for which fair values exceeded book values by $12,500,000 and $112,500,000, All inventories on hand at the purchase date was sold during 2021. The buildings have average remaining useful lives of 15 years. Hope, Inc. reported net income of $110,000,000 for the year ended December 31, 2021, and paid cash dividends of $50,000,000. The fair value of Jimin, Inc.’s investment in associate was $300,000,000 at December 31, 2021. How much is the value of the Investment in Associates on December 31, 2021?On January 3, 2023, Trycker, Incorporated acquired 40% of the outstanding common stock of Inkblot Company for $2,400,000. This investment gave Trycker the ability to exercise significant influence over Inkblot. Inkblot's assets on that date were recorded at $8,000,000 with liabilities of $2,000,000. There were no other differences between book and fair values. During 2023, Inkblot reported net income of $500,000 and paid dividends of $300,000. The fair value of Inkblot at December 31, 2023, is $7,000,000. Trycker elects the fair value option for its investment in Inkblot. How are dividends received from Inkblot reflected in Trycker's accounting records for 2023?On July 1, 2021, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $135 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At the date of acquisition of the stock, VB’s net assets had a total fair value of $440 million and a book value of $240 million. Of the $200 million difference, $28 million was attributable to the appreciated value of inventory that was sold during the last half of 2021, $132 million was attributable to buildings that had a remaining depreciable life of 15 years, and $40 million related to equipment that had a remaining depreciable life of 10 years. Between July 1, 2021, and December 31, 2021, VB earned net income of $36 million and declared and paid cash dividends of $28 million. Required:1. Prepare all appropriate journal entries related to the investment during 2021, assuming Gupta accounts for this investment by the equity method.2. Determine the amounts to be reported by Gupta.…
- On April 1, 2021, BBC Co. acquired a 30% stake in LTI Inc. for $ 100,000. This amount includes $ 40,000 that represents the excess of the fair market value over the book value of the identifiable net assets that LTI Inc. had on its books as of that date. Of this difference of $ 40,000, BBC attributes that $ 15,000 is due to inventory that was sold in its entirety during 2021, and the remaining $ 25,000 is due to goodwill. On the other hand, LTI generated a net income of $ 20,000 for 2021, and paid dividends of $ 2,500 for each quarter. As a consequence of these effects on LTI's books and financial statements, BBC will recognize investment income (or loss) for a. $4,500 b. $1,125 c. $3,450 d. ($10,500)On July 1, 2021, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $110 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At the date of acquisition of the stock, VB’s net assets had a total fair value of $360 million and a book value of $240 million. Of the $120 million difference, $22 million was attributable to the appreciated value of inventory that was sold during the last half of 2021, $84 million was attributable to buildings that had a remaining depreciable life of 15 years, and $14 million related to equipment that had a remaining depreciable life of 5 years. Between July 1, 2021, and December 31, 2021, VB earned net income of $24 million and declared and paid cash dividends of $16 million. Required:1. Prepare all appropriate journal entries related to the investment during 2021, assuming Gupta accounts for this investment by the equity method.2. Determine the amounts to be reported by Gupta.On July 1, 2024, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $116 million cash, giving Gupta the ability to exercise significant influence over VB's operations. At the date of acquisition of the stock, VB's net assets had a total fair value of $414 million and a book value of $236 million. Of the $178 million difference, $36 million was attributable to the appreciated value of inventory that was sold during the last half of 2024, $80 million was attributable to buildings that had a remaining depreciable life of 10 years, and $62 million related to equipment that had a remaining depreciable life of five years. Between July 1, 2024, and December 31, 2024, VB earned net income of $48 million and declared and paid cash dividends of $32 million. Required: 1. Prepare all appropriate journal entries related to the investment during 2024, assuming Gupta accounts for this investment by the equity method. 2. Determine the amounts to be reported by Gupta.…
- On July 1, 2021, Gupta Corporation bought 30% of the outstanding common stock of VB Company for $170 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At the date of acquisition of the stock, VB’s net assets had a total fair value of $490 million and a book value of $220 million. Of the $270 million difference, $50 million was attributable to the appreciated value of inventory that was sold during the last half of 2021, $160 million was attributable to buildings that had a remaining depreciable life of 10 years, and $60 million related to equipment that had a remaining depreciable life of 5 years. Between July 1, 2021, and December 31, 2021, VB earned net income of $60 million and declared and paid cash dividends of $50 million. Required:1. Prepare all appropriate journal entries related to the investment during 2021, assuming Gupta accounts for this investment by the equity method. a. Record the purchase of VB company shares for $170.0…On July 1, 2021, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $100 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At the date of acquisition of the stock, VB’s net assets had a total fair value of $350 million and a book value of $220 million. Of the $130 million difference, $20 million was attributable to the appreciated value of inventory that was sold during the last half of 2021, $80 million was attributable to buildings that had a remaining depreciable life of 10 years, and $30 million related to equipment that had a remaining depreciable life of 5 years. Between July 1, 2021, and December 31, 2021, VB earned net income of $32 million and declared and paid cash dividends of $24 million.Required:1. Prepare all appropriate journal entries related to the investment during 2021, assuming Gupta accounts for this investment by the equity method.2. Determine the amounts to be reported by Gupta:a. As an…On July 1, 2024, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $104 million cash, giving Gupta the ability to exercise significant influence over VB’s operations. At the date of acquisition of the stock, VB’s net assets had a total fair value of $366 million and a book value of $224 million. Of the $142 million difference, $24 million was attributable to the appreciated value of inventory that was sold during the last half of 2024, $80 million was attributable to buildings that had a remaining depreciable life of 10 years, and $38 million related to equipment that had a remaining depreciable life of five years. Between July 1, 2024, and December 31, 2024, VB earned net income of $32 million and declared and paid cash dividends of $26 million. Required: Prepare all appropriate journal entries related to the investment during 2024, assuming Gupta accounts for this investment by the equity method. Determine the amounts to be reported by Gupta.
- On July 1, 2024, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $136 million cash, giving Gupta the ability to exercise significant influence over VB's operations. At the date of acquisition of the stock, VB's net assets had a total fair value of $494 million and a book value of $256 million. Of the $238 million difference, $56 million was attributable to the appreciated value of inventory that was sold during the last half of 2024, $80 million was attributable to buildings that had a remaining depreciable life of 10 years, and $102 million related to equipment that had a remaining depreciable life of five years. Between July 1, 2024, and December 31, 2024, VB earned net income of $72 million and declared and paid cash dividends of $42 million. Required: 1. Prepare all appropriate journal entries related to the investment during 2024, assuming Gupta accounts for this investment by the equity method. 2. Determine the amounts to be reported by Gupta.…On April 1, 2024, BigBen Company acquired 35% of the shares of LittleTick, Incorporated BigBen paid $140,000 for the investment, which is $52,000 more than 35% of the book value of LittleTick's identifiable net assets. BigBen attributed $12,400 of the $52,000 difference to inventory that will be sold in the remainder of 2024, and the rest to goodwill. LittleTick recognized a total of $17,000 of net income for 2024, and paid total dividends for the year of $10,800; these dividends were issued quarterly. BigBen's investment in LittleTick will affect BigBen's 2024 net income by: Note: Round your answer to nearest whole dollar amount. Multiple Choice earnings of $2,901. a loss of $7,938. earnings of $4,463. earnings of $1,562.On January 1, 2022, Pop Co. acquired 75% of the outstanding common shares of Soda Inc. for $161,250 cash. On that date, Soda had common shares of $156,250 and retained earnings of $31,250. At acquisition, the identifiable assets and liabilities of Soda had fair values that were equal to carrying amounts except for inventory, which had fair value $8,000 greater than carrying amount and plant and equipment, which had fair values $10,000 greater than carrying amounts. The plant and equipment had a remaining useful life of 5 years on January 1, 2022.Any goodwill will be tested yearly for impairment. Balance sheets as of December 31, 2022 are presented below: Cash Accounts receivable Inventory Land Plant & Equipment, net Investment in Soda Inc. - equity Current liabilities Bonds payable Common shares Retained earnings Pop Co. $ 10,000 Soda Inc. $ 5,000 38,750 42,250 75,250 62,500 50,000 100,000 150,000 175,000 168,500 $384,750 $492,500 $ 45,500 - 338,000 109,000 $492,500 $ 47,125 128,125…