Karen Company bought 20% of Klaire Corporation's ordinary shares on January 1, 2018 for P11,400,000. Carrying...

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Karen Company bought 20% of Klaire Corporation's ordinary shares on January 1, 2018 for P11,400,000. Carrying amount of Klaire Company's net assets at purchase date totaled P50,000,000. Fair value and carrying amounts were the same for all items except for plant and inventory, for which fair values exceed their carrying amounts by P10,000,000 and P2,000,000 respectively. The plant has a 5-year Life. All inventory was sold during 2018. During 2018, Klaire Company's reported profit of P30,000,000 and paid a P10,000,000 cash dividend. Required: Based on the above and the result of your audit, answer the following: a. What amount should Karen Company report as net income related to this investment in 2018? b. The carrying amount of Investment in Klaire Company's as of December 31, 2018? 7. On January 1, 2018 Karen Company acquired a land and building on a cash basis for Php 800,000. Appraised values of the land and building are Php 200,000 and Php 300,000, respectively. Additional cost incurred is as follows: Php Commission paid to broker Non-refundable sales tax Labor cost on renovation of the building Demolition Cost on some of the portion of the building Proceeds from sale of demolition scrap Required: Based on the above facts, answer the following: a. How much is the cost of land b. How much is the cost of building 80,000 40,000 100,000 60,000 15,000 8. On January 1, 2018, Karen Company acquired an equipment for Php 500,000 on account with a term of 3/10, n/30. Additional cost incurred are as follows: * Freight and insurance- Php 15,000 12,000 13,000 Training cost of staff who will operate it The account was paid on January 10, 2018. How much is the cost of the equipment? Cost of testing & trial run Karen Company bought 20% of Klaire Corporation's ordinary shares on January 1, 2018 for P11,400,000. Carrying amount of Klaire Company's net assets at purchase date totaled P50,000,000. Fair value and carrying amounts were the same for all items except for plant and inventory, for which fair values exceed their carrying amounts by P10,000,000 and P2,000,000 respectively. The plant has a 5-year Life. All inventory was sold during 2018. During 2018, Klaire Company's reported profit of P30,000,000 and paid a P10,000,000 cash dividend. Required: Based on the above and the result of your audit, answer the following: a. What amount should Karen Company report as net income related to this investment in 2018? b. The carrying amount of Investment in Klaire Company's as of December 31, 2018? 7. On January 1, 2018 Karen Company acquired a land and building on a cash basis for Php 800,000. Appraised values of the land and building are Php 200,000 and Php 300,000, respectively. Additional cost incurred is as follows: Php Commission paid to broker Non-refundable sales tax Labor cost on renovation of the building Demolition Cost on some of the portion of the building Proceeds from sale of demolition scrap Required: Based on the above facts, answer the following: a. How much is the cost of land b. How much is the cost of building 80,000 40,000 100,000 60,000 15,000 8. On January 1, 2018, Karen Company acquired an equipment for Php 500,000 on account with a term of 3/10, n/30. Additional cost incurred are as follows: * Freight and insurance- Php 15,000 12,000 13,000 Training cost of staff who will operate it The account was paid on January 10, 2018. How much is the cost of the equipment? Cost of testing & trial run

Answer rating: 100% (QA)

a To determine the amount Karen Company should report as net income related to the investment in Klaire Company for 2018 we need to calculate the equi... View the full answer