On January 1,2020, ABC Company acquired 80 percent of DEF Company's Common Stock for P400,000 cash....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1,2020, ABC Company acquired 80 percent of DEF Company's Common Stock for P400,000 cash. At that date, DEF reported common stock outstanding of P300,000 and retained earnings of P 75,000, and the fair value of non-controlling interest was P80,000. The book values and fair values of DEF's assets and liabilities were equal, except for 2 items. The first item is building which had a fair value of P50,000 lower than book value and an 5-year remaining life and Inventory that is undervalued by P50,000. The inventory was sold during 2020. DEF reported the following data for 2020 and 2021 Year 2020 2021 Net Income P 500,000 700,000 Comprehensive Income P 600,000 800,000 Dividends Paid P 10,000 20,000 ABC reported net income (Including dividend income from investment in DEF) of P1,000,000 and paid dividends of P500,000 for both the years 1. How much is the goodwill / gain on bargain purchase ? 2. What is the amount of consolidated net income reported for 2020? 3. Using the same information, what is the amount of comprehensive income attributable to controlling interest for 2020? 4. What is the amount of consolidated net income reported for 2021? 5. Using the same information, what is the amount of comprehensive income attributable to controlling interest for 2021? On January 1,2020, ABC Company acquired 80 percent of DEF Company's Common Stock for P400,000 cash. At that date, DEF reported common stock outstanding of P300,000 and retained earnings of P 75,000, and the fair value of non-controlling interest was P80,000. The book values and fair values of DEF's assets and liabilities were equal, except for 2 items. The first item is building which had a fair value of P50,000 lower than book value and an 5-year remaining life and Inventory that is undervalued by P50,000. The inventory was sold during 2020. DEF reported the following data for 2020 and 2021 Year 2020 2021 Net Income P 500,000 700,000 Comprehensive Income P 600,000 800,000 Dividends Paid P 10,000 20,000 ABC reported net income (Including dividend income from investment in DEF) of P1,000,000 and paid dividends of P500,000 for both the years 1. How much is the goodwill / gain on bargain purchase ? 2. What is the amount of consolidated net income reported for 2020? 3. Using the same information, what is the amount of comprehensive income attributable to controlling interest for 2020? 4. What is the amount of consolidated net income reported for 2021? 5. Using the same information, what is the amount of comprehensive income attributable to controlling interest for 2021?
Expert Answer:
Answer rating: 100% (QA)
1 Calculation of goodwill Particulars Amount Outstanding common stock 300000 Retained earnings 75000 ... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
Posted Date:
Students also viewed these accounting questions
-
On January 1, 2012, Aspen Company acquired 80 percent of Birch Company's outstanding voting stock for $438,000. Birch reported a $457,500 book value and the fair value of the non-controlling interest...
-
On January 1, 2010, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $980,000 in cash and other consideration. At the acquisition date, Smashing...
-
On January 1, 2016, Aspen Company acquired 80 percent of Birch Company's voting stock for $288,000. Birch reported a $300,000 book value, and the fair value of the noncontrolling interest was $72,000...
-
If an investor holds a credit-linked note and the credit event does not occur, the investor receives: A. All promised cash flows as scheduled. B. All coupon payments as scheduled but not the par...
-
Is it possible in a fast-growth company to avoid stress?
-
A machine producing vitamin E capsules operates in such a way that the distribution of x = actual amount of vitamin E in a capsule can be modeled by a normal curve with a mean of = mg and standard...
-
Financial statement disclosures include each of the following except: a. notes to the financial statements. b. parenthetical disclosures. c. supplementary information. d. promotional giveaways.
-
A 1.50-kg horizontal, uniform tray is attached to a vertical ideal spring of force constant 185 N/m and a 275-g metal ball is in the tray. The spring is below the tray. so it can oscillate up-and...
-
This forecasting approach means that we're assuming that relationships between certain accounts stay the same, hence a 20% increase for each related account! Historical Projected 2021 2022 Sales...
-
The propeller in Prob. 9.1 is replaced with a six-blade turbine 400 mm in diameter, and the fluid to be agitated is a pseudoplastic power law liquid having an apparent viscosity of 15 P when the...
-
Certain principles dictate the proper design and use of documents and records. Briefly describe several of these principles.
-
A US investor bought 2 million lots (1 lot = 100 shares) of BMRI shares for IDR 6,150 per share. After 6 months, BMRI's share price increased to IDR 8,300 per share, and paid a dividend of IDR 100...
-
In October, Carla Vista Company reports 20,600 actual direct labor hours, and it incurs $213,300 of manufacturing overhead costs. Standard hours allowed for the work done is 23,700 hours. The...
-
My name is Holly. I am 45 years old. I was a single parent for about 12 years. I could not afford insurance for myself - it just wasn't in my budget. My kids always came first. If I got sick, I...
-
A debt of $401 due in 4 months and another debt of $638 due in 11 months are both to be paid with a single payment in 8 months. What single payment will pay off the two debts if the interest rate is...
-
Julie is the owner / operator of a massage parlor in Carmel. Last year she earned $ 4 0 0 , 0 0 0 in total revenue. Her explicit costs were $ 2 0 0 , 0 0 0 . During the year she received offers to...
-
Total Fixed Cost Unit Selling Price Unit Variable Cost Break-Even Units Existing Product New Product
-
At 31 December 20X9, the end of the annual reporting period, the accounts of Huron Company showed the following: a. Sales revenue for 20X9, $ 2,950,000, of which one- quarter was on credit. b....
-
A company acquires a subsidiary and will prepare consolidated financial statements for external reporting purposes. For internal reporting purposes, the company has decided to apply the equity...
-
Government officials of the City of Jones expect to receive general fund revenues of $400,000 in 2017 but approve spending only $380,000. Later in the year, as they receive more information, they...
-
Livro Company has three operating segments with the following information: In addition, corporate headquarters generates revenues of $2,000. What is the minimum amount of revenue that each of these...
-
For the graph of Figure 1.9, verify that \(A^{m}\) is not entirely non-zero for any \(m 3 2 Figure 1.9 - Paths of length 4 exist between each pair of vertices
-
Show that a connected directed graph is quasi-connected. Show that an undirected graph is quasi-connected if and only if it is connected.
-
Find all connected components of the graph below. 11 12 16
Study smarter with the SolutionInn App