4. An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct acquisition costs incurred were P140,000. On 31 December 2020 the fair value of the instrument was P1,100,000 and the transaction costs that would be incurred on sale were estimated at P120,000. If the investment is designated as FA@FVTOCI, what gain would be recognized in the financial statements for the year ended 31 December 2020? Group of answer choices Nil P40,000 P160,000 P420,000
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4.
An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct acquisition costs incurred were P140,000.
On 31 December 2020 the fair value of the instrument was P1,100,000 and the transaction costs that would be incurred on sale were estimated at P120,000.
If the investment is designated as FA@FVTOCI, what gain would be recognized in the financial statements for the year ended 31 December 2020?
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- 1. What is the gain on remeasurement to equity to be recognized for 2021?a. 1,500,000b. 4,500,000c. 2,250,000d. 0 2. What is the goodwill arising from the acquisition on January 1, 2021?a. 2,250,000b. 1,250,000c. 1,350,000d. 350,000 3. What is the carrying amount of the investment in associate on December 31, 2021?a. 11,250,000b. 11,800,000c. 12,000,000d. 14,300,000Shak Company acquired a financial instrument for P4,000,000 on March 31, 2020. The financial instrument is classified as financial asset at fair value through other comprehensive income. The direct acquisition cost incurred amounted to P700,000. On December 31, 2020, the fair value of the instrument was P5,500,000 and the transaction costs that would be incurred on the sale of the investment are estimated at P600,000. What gain should be recognized in statement of financial position for the year ended December 31, 20207 Select the correct response 900,000 200,000 800,000For letters a to d, identify how much to add or deduct from the Investment in Associate account of ABC based on the following transactions or events: a. As of Jan. 1, 2021, the fair value of the inventory of X was P100,000 higher than its carrying value. All of the inventory were sold as of the end of the year. b. The fair value of equipment held by X is P500,000 while its carrying value is P360,000 as of the beginning of the year. It has a remaining useful life of 3 years as of Dec. 31, 2021. c. X sold inventories costing P150,000 to ABC for P200,000. Only 75% of these inventories were sold by ABC to third parties as of the end of the year. d. Actuarial gains for the year totaled P400,000.
- On January 1, 2020, Marshall acquired an investment for P500,000 plus a purchase commission of P10,000. The investment is designated as financial asset at fair value through other comprehensive income. On December 31, 2020, quoted market price of the investment is P500,000. If the investment were sold, a commission of P15,000 would be paid. On December 31, 2020, the investment should be carried at A.P485,000B.P500,000C.P495,000D.P510,00011. The following information pertains to Nonagon Company's biological assets at December 31, 2021: Price of assets in an active market , P 5,000,000 Estimated broker's and dealer's commissions, P 50,000 Transport and other costs expected to be incurred to bring the assets to the market, P 40,000 Selling price in a binding sale agreement, P 5,100,000 At what amount should the biological assets be presented on the statement of financial position?An entity accounts for non-current assets using the revaluation model. On 30 June 2020, the entity classified two items of non-current assets as held for sale in accordance with PFRS5. The following information relates to these assets: Asset 1 Asset 2 Carrying amount before classification as held for sale P400,000 P300,000 Revaluation surplus before classification as held for sale 60,000 30,000 Fair value, 30 June 2020 450,000 260,000 Estimated costs to sell 20,000 12,000 The balance of revaluation surplus as of 30 June 2020 after classification of the assets as held for sale is
- An entity accounts for non-current assets using the revaluation model. On 30 June 2020, the entity classified two items of non-current assets as held for sale in accordance with PFRS5. The following information relates to these assets: Asset 1 Asset 2 Carrying amount before classification as held for sale P400,000 P300,000 Revaluation surplus before classification as held for sale 60,000 30,000 Fair value, 30 June 2020 450,000 260,000 Estimated costs to sell 20,000 12,000 The total expense to be recognized in profit or loss related to these assets isE3.5 Acquisition analysis, including fair value adjustment for plant and equipment (Section 3.6.2) On 1 October 20XO, EF Ltd acquired all the issued ordinary shares of GH Ltd. The terms of the acquisition agreement specified that EF Ltd must pay the existing shareholders of GH Ltd $1.5million immediately and a further $1.5million on 30 September 20X1. The incremental cost of short-term finance to EF Ltd is 10% p.a. At acquisition date, the issued capital and reserves of GH Ltd were as follows: Issued capital 1 200000 Retained eamings 1/10/20X0 1400000 At 1 October 20xO, the plant and equipment of GH Ltd had a carrying amount that was $150000 less than its fair value. The company income tax rate is 30%. REQUIRED (a) Prepare the general journal entries for the accounting records of EF Ltd to record: (i) the investment in GH Ltd on 1 October 20X0 (ii) the cash payment of the $1500 000 on 30 September 20X1.19. On May 01, 2020, Maria Company acquired the net assets of Luisa Company for a consideration transferred of P32,000,000. At the acquisition date, the carrying amount of Luisa's net assets was P20,000,000 & a temporary appraisal of P28,000,000 was attributed to the net assets. At December 31, 2020, a provisional fair value of P26,000,000 was attributed to the net assets. An additional valuation received on March 31, 2021 increased this provisional fair value by P2,000,000 and on June 01, 2021 this fair value was finalized with a decrease by P4,000,000 from the last valuation date. CHAPTER 1: BUSINESS COMBINATION Page | 49 What amount should the surviving company present for goodwill in its separate statement of financial position at December 31, 2021? a. P12,000,000 b. P8,000,000 c. P6,000,000 d. P4,000,000
- Identify how much to add or deduct from the Investment in Associate account of ABC based on the following transactions or events: As of Jan. 1, 2021, the fair value of the inventory of X was P100,000 higher than its carrying value. All of the inventory were sold as of the end of the year.SPK NOW Company owned the following investments at year-end before fair value adjustments and amortization: FA@FVTPL, P 600,000; FA@FVTOCI, P350,000; FA@AC, P470,000. What total amount of noncurrent assets related to the investments should be reported at year-end? a.P950,000 b.P1,420,000 c. P470,000 d. P820,0006. Tulip Company purchased the net assets of another entity for P2,000,000. On the sate of the transaction, the acquire had P800,000 of liabilities The assets of the acquiree at fair value were $1,900,000 for current assets and P1,600,000 for noncurrent assets. What is the amount of gain on bargain purchase? a. P 700,000 b. P-700,000 c. P 800,000 d. P-800,000