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- 1. kol Company acquired a financial asset as its market value of Php5,000,000. Broker fees of Php500,000 were incurred in relation to the purchase. What amount should initially be recognized for the financial asset, if it is classified as at FVOCI? 2. n January 1, 2019, Blackpink Company purchased 10% of anther entity’s outstanding ordinary shares of P6,000,000. The following data pertain to the investee’s operations for 2019 and 2020. 2019 2020Net income 2019 -3,000,000 2020-4,000,000Dividend Income 2019 -None 2020- 9,000,000What amount should be reported as dividend income in 2020?On 1 July 2014 Padma Ltd acquires 25 per cent of the issued capital of Jamuna Ltd for a cash consideration of $360 000. At the date of acquisition, the shareholders’ equity of Jamuna Ltd is:Share capital $450 000Retained earnings $300 000Total shareholders’ equity 750 000 Additional information• On the date of acquisition, buildings have a carrying amount in the accounts of Jamuna Ltd of $240 000 and a market value of $300 000. The buildings have an estimated useful life of 10 years after 1 July 2014.• For the year ending 30 June 2015 Jamuna Ltd records an after-tax profit of $90 000, from which it pays a dividend of $30 000.• For the year ending 30 June 2016 Jamuna Ltd records an after-tax profit of $300 000, from which it pays a dividend of $150 000.• Assume a tax rate of 30% is assumed Please answer: Apply equity method of accounting to:(a) Calculate the amount of goodwill at the date of acquisition (b) Prepare the journal entries for the year ending 30 June 2015 (c) Prepare the…On June 30, 20x1, Cockroach Co. acquired 75,000 of Nymph Co.'s 100,000 outstanding equity shares with par value per share of ₱4 for₱16 per share. At the time of acquisition, the retained earnings of Nymph were ₱320,000. The quoted price of Nymph's shares was ₱14per share at acquisition date. How much is the goodwill to be presented in the June 30, 20x3 consolidated financial statements?
- On 1 July 2014 Padma Ltd acquires 25 percent of the issued capital of Jamuna Ltd for a cash consideration of $360 000.At the date of acquisition, the shareholders’ equity of Jamuna Ltd is:Share capital $450 000Retained earnings $300 000Total shareholders’ equity 750 000 Additional information• On the date of acquisition, buildings have a carrying amount in the accounts of Jamuna Ltd of $240 000 and a market value of $300 000. The buildings have an estimated useful life of 10 years after 1 July 2014.• For the year ending 30 June 2015 Jamuna Ltd records an after-tax profit of $90 000, from which it pays a dividend of $30 000.• For the year ending 30 June 2016 Jamuna Ltd records an after-tax profit of $300 000, from which it pays a dividend of $150 000.• Assume a tax rate of 30% is assumedRequiredApply equity method of accounting to:(a) Calculate the…On 1 July 2014 Padma Ltd acquires 25 per cent of the issued capital of Jamuna Ltd for a cash consideration of $360 000.At the date of acquisition, the shareholders’ equity of Jamuna Ltd is:Share capital $450 000Retained earnings $300 000Total shareholders’ equity 750 000Additional information• On the date of acquisition, buildings have a carrying amount in the accounts of Jamuna Ltd of $240 000 and a market value of $300 000. The buildings have an estimated useful life of 10 years after 1 July 2014.• For the year ending 30 June 2015 Jamuna Ltd records an after-tax profit of $90 000, from which it pays a dividend of $30 000.• For the year ending 30 June 2016 Jamuna Ltd records an after-tax profit of $300 000, from which it pays a dividend of $150 000.• Assume a tax rate of 30% is assumedOn 1 July 2019, Brad Ltd acquired all of the assets and liabilities of Pitt Ltd. In exchange for these assets and liabilities, Brad Ltd issued 100 000 shares that at date of issue had a fair value of $5.20 per share. Costs of issuing these shares amounted to $1000. Legal costs associated with the acquisition of Pitt Ltd amounted to $1200. The asset and liabilities of Pitt Ltd at 1 July 2019 were as follows: Carrying amount Fair value Assets $ 2000 10000 64 000 320 000 $ 2000 10000 Cash Accounts receivable 68 000 232 000 Inventories Equipment Accumulated depreciation – equipment (96 000) 240 000 Patents 280 000 Liabilities (16 000) (64 000) Accounts payable (16000) (64 000) Debentures Required (a) Prepare the acquisition analysis at 1 July 2019 for the acquisition of Pitt Ltd by Brad Ltd.
- 6 City Infrastructure Holdings Ltd (CIH) acquired 100% of the 300,000 issued shares in Network Maintenance Services (NMS) on 1 July 2021. The consideration provided to shareholders of NMS consisted of $1.20 in cash plus 1 share in CIH for each share held. The fair value of the CIH shares on the date of acquisition was $1.50. At the date of acquisition the records of NMS included the following information: Share Capital $300,000.00 General Reserve $30,000.00 Retained Earnings $410,000.00 All of the assets and liabilities in the records of NMS were considered to be fairly valued at the acquisition date with the exception of Equipment. Question : what is the total value of pre-acquisition capital and reserves?Please assist that if on 1 July 2014 Padma Ltd acquires 25 per cent of the issued capital of Jamuna Ltd for a cash consideration of $360 000. At the date of acquisition, the shareholders’ equity of Jamuna Ltd is: Share capital $450 000 Retained earnings $300 000 Total shareholders’ equity 750 000 Additional information • On the date of acquisition, buildings have a carrying amount in the accounts of Jamuna Ltd of $240 000 and a market value of $300 000. The buildings have an estimated useful life of 10 years after 1 July 2014. • For the year ending 30 June 2015 Jamuna Ltd records an after-tax profit of $90 000, from which it pays a dividend of $30 000. • For the year ending 30 June 2016 Jamuna Ltd records an after-tax profit of $300 000, from which it pays a dividend of $150 000. • Assume a tax rate of 30% is assumed Required Apply equity method of accounting to: (a) Calculate the amount of goodwill at the date of acquisition (b) Prepare the journal entries for the year ending 30 June…On 1 July 2014 Padma Ltd acquires 25 per cent of the issued capital of Jamuna Ltd for a cash consideration of $360 000. At the date of acquisition, the shareholders’ equity of Jamuna Ltd is:Share capitalRetained earningsTotal shareholders’ equityAdditional information$450 000 $300 000 750 000• On the date of acquisition, buildings have a carrying amount in the accounts of Jamuna Ltd of $240 000 and a market value of $300 000. The buildings have an estimated useful life of 10 years after 1 July 2014.• For the year ending 30 June 2015 Jamuna Ltd records an after-tax profit of $90 000, from which it pays a dividend of $30 000.• For the year ending 30 June 2016 Jamuna Ltd records an after-tax profit of $300 000, from which it pays a dividend of $150 000.• Assume a tax rate of 30% is assumedRequiredApply equity method of accounting to:(a) Calculate the amount of goodwill at the date of acquisition (3 marks) (b) Preparethejournalentriesfortheyearending30June2015(3marks) (c) Prepare the…
- Pineapple Company acquired an 80% interest in Samsung Company for $272,000 cash on January 1, 2018. Samsung had the following Balance Sheet on the date of acquisition: Assets $ Liabilities $ Accounts receivable 90,000 Accounts payable 50,000 Depreciable fixed asstes 200,000 Bonds payable 50,000 Land 50,000 Discount on bonds payable (1,620) Goodwill 10,000 Comm stock ($10 par) 100,000 Retained Earnings 151,620 Total Asstes 350,000 Total liabilities & Equity 350,000 The excess of the price paid over book value is attributable to the Depreciable Fixed Assets, which have a fairvalue of $260,000. The Depreciable Assets have a 10 year remaining life.Samsung sold a piece of Land to Pineapple for $60,000 on January 1, 2019. It cost Samsung $50,000 to purchasethe land.On January 1, 2020, Samsung held merchandise acquired from Pineapple for $20,000. This beginning inventoryhad an applicable gross profit of 40%. During 2020, Pineapple sold $60,000 worth of merchandise…On January 1, 2023, Tamarisk Company issued 1,450 of its $20 par value common shares with a fair value of $60 per share in exchange for the 2,000 outstanding common shares of Sheffield Company in a purchase transaction. Registration costs amounted to $2,500, paid in cash. Just prior to the acquisition, the balance sheets of the two companies were as follows: Cash Accounts receivable (net) Inventory Plant and equipment (net) Land Total assets Accounts payable Notes payable Common stock, $20 par value Other contributed capital Retained earnings Total equities Tamarisk Company $83,000 103,000 56,000 95,000 23,500 $360,500 $63,000 89,500 100,000 60,000 48,000 $360,500 Sheffield Company $12,600 18,000 25,000 46,500 22,000 $124,100 $19,500 30,000 40,000 27,500 7,100 $124,100 Any difference between the book value of equity and the value implied by the purchase price relates to goodwill.On 1 January 2020, Petre Ltd acquired a 60% interest in the issued share capital of Sanford Ltd, for a cash consideration of $6,000,000. On the acquisition date, the retained profits of Sandford Ltd were $3,000,000. The statement of financial position of the two companies for the year ended 31 December 2020 were as follow:- Petre Ltd Sanford Ltd ASSETS Property, plant and equipment 15,500 8,800 Investment in Sanford Ltd 6,000 - Inventories 5,000…