What amount should be recorded as the closing amount on this investment
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Maenetja Limited acquired 1000 shares in Manana Limited on 1 December 2014 at the fair value of R15 per share. Transaction costs amounted to R200. At the date of acquisition the company elected to recognize subsequent changes in the fair value of this investment in other comprehensive income (OCI). The company’s policy is to release any gains or losses resulting from these fair value adjustments to retained earnings when the shares are sold.
On 31 December 2014 the market value of Manana Limited’s shares was R18. On 30 June 2015, 200 shares were sold for R19.50. The market value of the shares at 31 December 2015 was R14.
What amount should be recorded as the closing amount on this investment
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- On October 1, 2017, the Puppy Eyes Company acquired the net assets of The Cat Love Company when the fair value of Cat Love’s net assets was P116 million and their carrying amount was P120 million. The consideration transferred comprised P200 million in cash transferred at acquisition date, plus another P60 million in cash to be transferred 11 months after the acquisition date if a specified profit target being met by Cat Love. At the acquisition date there was only a low probability of the profit target being met, so the fair value of the additional consideration liability was P10 million. In the event the profit target was met and the P60 million cash was transferred, what amount should Puppy Eyes present for Goodwill in its statement of Financial position on December 31, 2017, according to IFRS 3 Business Combinations?On October 1, 2017, the Puppy Eyes Company acquired the net assets of The Cat Love Company when the fair value of Cat Love’s net assets was P116 million and their carrying amount was P120 million. The consideration transferred comprised P200 million in cash transferred at acquisition date, plus another P60 million in cash to be transferred 11 months after the acquisition date if a specified profit target being met by Cat Love. At the acquisition date there was only a low probability of the profit target being met, so the fair value of the additional consideration liability was P10 million. In the event the profit target was met and the P60 million cash was transferred, what amount should Puppy Eyes present for Goodwill in its statement of Financial position on December 31, 2017, according to IFRS 3 Business Combinations? Group of answer choices 84 million 144 million 94 million 140 millionDDaniel Ltd purchased 75 per cent of the issued capital and in the process gained control over Riccardo Ltd on 1 July 2020. The fair value of the net assets of Riccardo Ltd at purchase was represented by: Share Capital $3,760,000 Retained Earnings 1,320,000 Daniel Ltd paid cash consideration of $4 000 000 for Riccardo Ltd. During the period ended 30 June 2021, Riccardo Ltd paid management fees of $540 000 to Daniel Ltd and Riccardo Ltd had an operating profit of $980 000. Riccardo Ltd's opening retained earnings at the beginning of the period were $1 460 000. At the end of the period Riccardo Ltd declared a dividend of $90 000. There were no other inter-company transactions. Goodwill was determined to have been impaired by $19 000 during the period. Companies in the group accrue dividends when they are declared by subsidiaries.For the period ended 30 June 2021, what consolidation journal entries are required and what is the non-controlling interest?
- On June 30, 2016, Gab Company purchased 25% of the outstanding ordinary shares of IB Co. at a total cost of P2,100,000. The book value of IB Co.’s net assets on acquisition date was P7,200,000. For the following reasons, Gab was willing to pay more than book value for the IB Co. shares: IB Co. has depreciable assets with a current fair value of P180,000 more than their book value. These assets have a remaining useful life of 10 years. IB Co. owns a tract of land with a current fair value of P900,000 more than its carrying amount. All other identifiable tangible and intangible assets of IB Co. have current fair values that are equal to their carrying amounts. IB Co. reported net income of P1,620,000, earned evenly during the current year ended December 31, 2016. Also in the current year, it declared and paid cash dividends of P315,000 to its ordinary shareholders. Market value of IB Co.’s ordinary shares at December 31, 2016 is P9 million. Cabbage Company’s financial year-end is…On June 30, 2016, Gab Company purchased 25% of the outstanding ordinary shares of IB Co. at a total cost of P2,100,000. The book value of IB Co.’s net assets on acquisition date was P7,200,000. For the following reasons, Gab was willing to pay more than book value for the IB Co. shares: IB Co. has depreciable assets with a current fair value of P180,000 more than their book value. These assets have a remaining useful life of 10 years. IB Co. owns a tract of land with a current fair value of P900,000 more than its carrying amount. All other identifiable tangible and intangible assets of IB Co. have current fair values that are equal to their carrying amounts. IB Co. reported net income of P1,620,000, earned evenly during the current year ended December 31, 2016. Also in the current year, it declared and paid cash dividends of P315,000 to its ordinary shareholders. Market value of IB Co.’s ordinary shares at December 31, 2016 is P9 million. Cabbage Company’s financial year-end is…Q2 Maenetja Limited acquired 1000 shares in Manana Limited on 1 December 2014 at the fair value of R15 per share. Transaction costs amounted to R200. At the date of acquisition the company elected to recognize subsequent changes in the fair value of this investment in other comprehensive income (OCI). The company’s policy is to release any gains or losses resulting from these fair value adjustments to retained earnings when the shares are sold. On 31 December 2014 the market value of Manana Limited’s shares was R18. On 30 June 2015, 200 shares were sold for R19.50. The market value of the shares at 31 December 2015 was R14. What are the correct journal entries that should be recorded initially when the shares purchased on 1 December 2014? Select one: a. DR Investment R15 000DR Transaction costs R200 CR Bank/Liability R15 200 b. DR Investment R15 000…
- Tinto Ltd obtained control of Suda ltd by acquiring 80% of the issued share capital of Suda ltd at 1 January 2015. The consideration is to be settled as follows: · A cash payment of R1 000 000 · The fair value of machine is R500 000 is recorded in Tinto ltd · Tinto ltd will issue new shares to the seller, to the value of R600 000 Journalize the above transaction in the books of Tinto ltd.Honesty Company, an SME, acquired 30% interest of the equity of Integrity Company for P500,000 plus a transaction cost of P10,000 on January 1, 2022. At the end of the year, Integrity reported a profit of P400,000 and declared dividends of P150,000. The dividends were paid on January 15, 2023.Published price quotation does not exist for Integrity. Using appropriate valuation techniques, Honesty determined the fair value of its investment in Integrity at December 31, 2022 as P560,000. Costs to sell are estimated at 3% of the fair value of the investment. Answer the following subquestion relating to this one problem: a. Using the Cost Model, how much is Carrying Value of the Investment at December 31, 2022? b. Using the Equity Model, how much is the amount to be reported by Honesty in the profit or loss for 2022? _________________&Power acquired the shares of Super on 1 January 2016 when the retained profit and general reserve balances of Super were RM250,000 and RM50,000 respectively. On this date, the fair values of the non-current assets in Super were as follows: land RM500,000; buildings RM420,000 and plant & machinery RM560,000. The fair values have not been reflected in the books of Super. The original cost of the buildings was RM375,000 and buildings are depreciated over an estimated useful life of twenty-five years. On the date of acquisition, the plant and machinery had a remaining useful life of eight years. Depreciable non-current assets are depreciated using the straight-line method and depreciation charge for the year 2020 has been provided in the financial statements. The summarized statements of financial position of Power and Super as at 31 December 2020 were as follows: Power Super RM RM 400,000 180,000 Land, at cost Buildings, at net book value Plant and machinery, at net book value Investment…
- The following intragroup transactions took place during the period ended 30 June 2022: Heart Ltd paid $25 000 during the period ended 30 June 2022 as management fees for services provided by Clear Ltd. During the period ended 30 June 2022, Heart Ltd declared a final dividend of $12 000 out of post-acquisition profits. Heart Ltd rented a spare warehouse to Clear Ltd starting from 31 December 2021 for 1 year. The total charge for the rental was $40 000, and Clear Ltd will pay this amount to Heart Ltd at 31 December 2022. Required In relation to the above intragroup transactions: 1. Prepare adjusting journal entries for the consolidation worksheet at 30 June 2022. 2. Explain in detail why you made each adjusting journal entry, whether there is a tax effect and if the NCI share of equity required adjustment.Honesty Company, an SME, acquired 30% interest of the equity of Integrity Company for P500,000 plus a transaction cost of P10,000 on January 1, 2022. At the end of the year, Integrity reported a profit of P400,000 and declared dividends of P150,000. The dividends were paid on January 15, 2023.Published price quotation does not exist for Integrity. Using appropriate valuation techniques, Honesty determined the fair value of its investment in Integrity at December 31, 2022 as P560,000. Costs to sell are estimated at 3% of the fair value of the investment. Answer the following questions related to this 1 problem: a. Using the Equity Model, how much is Carrying Value of the Investment at December 31, 2022? b. Using the Cost Model, how much is the amount to be reported by Honesty in the profit or loss for 2022? c. Using the Fair Value Model, how much is Carrying Value of the Investment at December 31, 2022? __________________a) Liala Ltd acquired all the issued shares of Jordan Ltd on 1 January 2015. The following transactions occurred between the two entities: • On 1 June 2016, Liala Ltd sold inventory to Jordan Ltd for $12,000, this inventory previously costed Liala Ltd $10,000. By 30 June 2016, Jordan Ltd had sold 20% of this inventory to other entities for $3,000. The other 80% was all sold to external entities by 30 June 2017 for $13,000. During the 2016–17 period, Jordan Ltd sold inventory to Liala Ltd for $6,000, this being at cost plus 20% mark-up. Of this inventory, 20 % remained on hand in Liala Ltd at 30 June 2017. The tax rate is 30%. Required: (i) Prepare the consolidation worksheet entries for Liala Ltd at 30 June 2017 in relation to the intragroup transfers of inventory. I (ii) Compute the amount of cost of goods sold to be reported in the consolidated income statement for 2017 relating to the relevant intra-group sales. b) On 1 July 2016, Liala Itd sold an item of plant to Jordan Ltd Ltd…