=.On 1/1/X4, Phillip invested $1,100,000 in Sleeper's ordinary shares (35% owned). Sleeperreported:Assets $3,500,000Liabilities600,000The book value of Sleeper's net assets approximated market value except for the following assets:Inventory---- $20,000 overstated,Equipment (1/1/X2 purchased)Trademark - $70,000 understated====$50,000 understated,For 20X4, Sleeper earned $90,000, declared cash dividends of $60,000, and paid dividends of$40,000. Sleeper's inventory always take perpetual, FIFO and Equipment useful life 6 years,straight line depreciation and no salvage value.For 20X5, Sleeper earned 100,000.Investment incomeInvestment in Sleeper at year-endRetained earnings increase (decrease)Goodwill RecognizedWhat amounts does Phillip report for 20X4? (Give calculating Process)CostEquityCalculate and prepare Journal Entries if Philip sold 10% of Sleeper's stocks in $200,000on April 1,2025 (Equity Method and Assume Sleeper's earning is evenly).

The equity method helps to record the profit gained from its investment in another organization.…

Answered: =. On 1/1/X4, Phillip invested…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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on 1/1/2019 X CO acquired 80% of Y common stock for $150,000 in the same day the y net assets was $ 140,000 ,in the same date the fair value of assets and liabilities were equal .year ended 31/12/2019 y reported income $50,000 , declared dividend $30,000 , X using equity methods what is non controlling interest in net income balance on 31/12/2019 Select one: a. 37,500 b. 10,000 c. 4,000 d. 41,500
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8. Kopi Company acquired all of the outstanding ordinary shares of an acquiree paying P9,000,000 cash. The carrying amount and fair value of the assets and liabilities of the acquiree were: Carrying amount Fair Value Accounts receivable P 1,500,000 Inventory 4,800,000 Land 7,500,000 Property and Equipment 2,500,000 Accounts payable 2,500,000 Bonds Payable 1,900,000 P 1,200,000 3,000,000 5,000,000 2,000,000 2,500,000 1,500,000 What amount should be recognized as goodwill or negative goodwill? a. P 1,900,000 b. P-1,900,000 c. P 2,900,000 d. P-2,900,000
Garrison holds a controlling interest in Robertson’s outstanding stock. For the current year, the following information has been gathered about these two companies: Garrison RobertsonSeparate $300,000 $200,000operating income (includes $50,000 intra-entity gross profit in ending inventory)Dividends paid ...32,000 50,000Tax rate . . . . . . . . . 40% 40% Garrison uses the initial value method to account for the investment in Robertson. Garrison’s separate operating income figure does not include dividend income for the current year.a. Assume that Garrison owns 80 percent of Robertson’s voting stock. On a consolidated tax return, what amount of income tax is paid?b. Assume that Garrison owns 80 percent of Robertson’s voting stock. On separate tax returns, what total amount of income tax is paid?c. Assume that Garrison owns 70 percent of Robertson’s voting stock. What total amount of income…
Delaney Company sells, for $280,000, a 40% of the shares it owns in Hunter Company. The carrying value of the Equity Investment relating to these shares is $240,000 on the date of sale. The journal entry to record the sale assuming Delaney keeps control over Hunter includes: Select one: A. Equity investment, debit, $240,000 B. Gain, credit, $40,000 C. APIC, credit, $40,000 D. Equity investment, credit, $280,000
Odom Ltd purchased a 30% shareholding in Bryant Ltd on 1 Jan 20X7 for $60 000. This purchase resulted in Odom Ltd having significant influence over Bryant Ltd. Bryant's assets were recorded at fair values and its owners' equity, totalling $180 000, was: Share capital $80 000 Reserves $60 000 Retained profits $40 000 During 20X7 Bryant Ltd reported profit of $100 000, from which a dividend of $60 000 was paid. Also, during the year, Bryant revalued its assets upwards by $50 000, and sold inventories to Willams Ltd which is the subsidiary of Odom. Bryant made a profit of $4,000. Half of the inventories were still held by Willams by the year-end. Odom Ltd has an 80% equity interest in Willams Ltd. Required: Prepare journal entries for Odom Ltd to account for its investment in Bryant Ltd using the Equity Method. Use the Reclassification Method to account for the profit and dividends that Odom shares from Bryant. (Using the provided journal entry template to enter your answer;…
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Sheridan Corporation purchased for $282,000 a 30% interest in Murphy, Inc. This investment enables Sheridan to exert significant influence over Murphy. During the year, Murphy earned net income of $172,000 and paid dividends of $65,000.Prepare Sheridan’s journal entries related to this investment.
On January 1, 20x2, Gold Company purchased a computer with an expected economic life of five years. On January 1, 20x4, Gold sold the computer to TLK Corporation and recorded the following entry: Cash 39,000 Accumulated Depreciation 16,000 Computer Equipment 40,000 Gain on sale of equipment 15,000 TLK Corporation holds 60 percent of Gold’s voting shares. Gold reported net income of P45,000, and TLK reported income from its own operations of P85,000 for 20x4. There is no change in the estimated life of the equipment as a result of the inter-corporate transfer. In the preparation of the 20x4 consolidated balance sheet, the computer equipment will be: A. Debited for 1,000 C. Credited for 24,000B. Debited for 15,000 D. Debited for 40,000
am. 76.

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