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- Ames Corporation repurchases 10,000 shares of its common stock for $12 per share. The shares were originally issued at an average price of $10 per share. Later it resells 6,000 of the shares for $15 per share and the remaining 4,000 shares for $17 per share. How much gain or loss should Ames report on its income statement as a result of these transactions? $38.000 gain $0 $20,000 loss $20,000 loss and $38,000 gainOn January 2, 20x1, Paul Corp. acquired 20% ownership interest in Simon Corp. for P1,350,000 and the carries the investment using the cost model. On December 31, 20x1, Simon Corp. declared and paid dividends amounting to P500,000 and the net income was P2,000,000. On January 10, 20x2, Paul Corp. acquired another 50% ownership interest in Simon Corp for P3,000,000. At that date, Simon Corp. has identifiable assets with book value of P6,000,000 and fair value of P7,200,000 and it has liabilities with book and fair value of P1,500,000. Assuming Paul Corp. measures the NCI at fair value amounting to P2,250,000, what is the amount of goodwill?On January 2, 20x1, Paul Corp. acquired 20% ownership interest in Simon Corp. forP1,350,000 and the carries the investment using the cost model. On December 31, 20x1,Simon Corp. declared and paid dividends amounting to P500,000 and the net income wasP2,000,000. On January 10, 20x2, Paul Corp. acquired another 50% ownership interest in Simon Corp forP3,000,000. At that date, Simon Corp. has identifiable assets with book value of P6,000,000and fair value of P7,200,000 and it has liabilities with book and fair value of P1,500,000.Assuming Paul Corp. measures the NCI at fair value amounting to P2,250,000, what is theamount of goodwill? 600,000 750,000 300,000 210,000
- 16. On January 1, 20x5, Paz acquired 80% of Shey outstanding ordinary shares for P950,000. Paz uses the cost method to record the investment account. The statement of financial position of Paz and Shey on December 31, 20x1 are as follows: Paz Shey Cash 2,500,000 1,000,000 Accounts Receivable 500,000 250,000 Inventory 800,000 200,000 Investment in Shey 950,000 - Land 2,000,000 - Building – net…15. On January 1, 20x5, Paz acquired 80% of Shey outstanding ordinary shares for P950,000. Paz uses the cost method to record the investment account. The statement of financial position of Paz and Shey on December 31, 20x1 are as follows: Paz Shey Cash 2,500,000 1,000,000 Accounts Receivable 500,000 250,000 Inventory 800,000 200,000 Investment in Shey 950,000 - Land 2,000,000 - Building – net…on January 1, 20x1 entitiy A acquires 30% interest in Entity B for 600,000. Entity B reports profit of 200,000 and declares dividends of 50,000 in 20x1. How much is the carrying amount of the investment in associate on Dec31, 20x1
- 9.On January 1, 2021, White Company acquired 25,000 shares of Black Company for P900,000. Black has 100,000 total outstanding shares. Black’s assets and liabilities approximate their fair values. In 2021, Black reported profit of P2,000,000, declared and paid cash dividends of P600,000 and reported property revaluation decrease of P80,000. In its financial statements for the year ended December 31, 2021, how much should White Company report as share in the associate’s profit and investment in associate, respectively? 500,000 ; 1,170,000 500,000 ; 1,270,000 500,000 ; 1,230,000 500,000 ; 1,270,000On lanuary 1, 2020. BeeGees Company acquired a 30% interest in A1 Company for P2,500,000. On this date, Al's shareholders' equity was P5,000,000. The carrying amount of Al's identifiable net assets approximated their fair values, except for land whose fair value exceeded its carrying amount by P2,000,000. A1 reported profit of P800,000 and paid dividends of P100,000.What is the carrying amount of the investment in associates at December 31,2020? a. P2,710,000 b. P2,700,000 c. P2,670,000 d. P2,470,00014.On September 1, 2021, Sad Company acquires 35% of the 100,000 outstanding shares of Happy Company for P1,200,000. Happy Company’s net identifiable assets are fairly valued on this date. In 2021, Happy Company reports profit of P1,500,000 and declares and pays cash dividends of P600,000. For the year ended December 31, 2021, how much should Sad Company report as share in the associate’s profit and investment in associate, respectively? 175,000 ; 1,165,000 210,000 ; 1,200,000 350,000 ; 1,340,000 131,200 ; 1,121,250
- Gaw Company purchased 15% of the common stock of Trace Corporation for $150,000 on 1/1/X1. At the time, Trace's equity included $500,000 of capital stock and $500,000 retained earnings. Gaw selected the fair-value method to account for this investment. On 12/31/X1, Trace's stock had a $1,200,000 total market value. Trace reported net income of $200,000 for year X1 and paid dividends of $60,000 on October 1, X1. How much income should Gaw recognize from its Trace investment in year X1?18.On August 20X1, ABC Company bought 10,000 shares of Z Corp at P120,000. Commission and taxes related to the acquisition were P5,000. On Dec 31, 20X1 Z Corp's share had a fair value of P14 per share. On Jan 4, 20X2 half of the shares were sold at P15 per share. Transaction costs related to the sale were P3,500. ABC Company's investment model is to hold collect and sell.How much is the gain (loss) on sale at Jan 20X2? 15,000 11,500 5,000 1,500
