The machinery has a remaining useful life of 5 years. Mobi Co.'sdividends of P500,000 in 20x1. How much are the (1) impliedgoodwill (negative goodwill) on the investment; (2) share in theNALof Black Coling sharesir values. Ied and paidrevaluationfor the yeCo. reportin associa4. On January 1, 20x1, Arco Co. acquired 20% interest in MobiCo. for P1,600,000. On this date, the carrying amounts of MobiCo.'s assets and liabilities approximate their fair values exceptfor the following:InventoryMachineryCarrying amountFair value300,0001,800,000400,0001,500,000ai equity, at book value, was P8,000,000 on Jan. 1, 20x1. Mobieported profit of P3,000,000 and declared and paid cash0.0000,000will (negative goodwill) on the investment; (2) share in the Chapter 14Investassociate's profit in 20x1; and (3) carrying amount of theinvestment in associate on Dec. 31, 20x1?a. 40,000; 592,000; 2,029,000b. 50,000; 750,000; 2,255,000c. (40,000); 632,000; 2,132,000d. 40,000; 592,000; 2,092,000

An associate is the one whose 20% to 50% shares are held by another company. Such a company has…

4. On January 1, 20x1, Arco Co. acquired 20% interest in Mobi Co. for P1,600,000. On this date, the carrying amounts of Mobi Co.'s assets and liabilities approximate their fair values except for the following: Fair value Carrying amount 300,000 400,000 Inventory Machinery 1,800,000 1,500,000 e machinery has a remaining useful life of 5 years. Mobi Co.'s total equity, at book value, was P8,000,000 on Jan. 1, 20x1. Mobi Co. reported profit of P3,000,000 and declared and paid cash dividends of P500,000 in 20x1. How much are the (1) implied goodwill (negative goodwill) on the investment; (2) share in the

4. On January 1, 20x1, Arco Co. acquired 20% interest in Mobi Co. for P1,600,000. On this date, the carrying amounts of Mobi Co.'s assets and liabilities approximate their fair values except for the following: Fair value Carrying amount 300,000 400,000 Inventory Machinery 1,800,000 1,500,000 e machinery has a remaining useful life of 5 years. Mobi Co.'s total equity, at book value, was P8,000,000 on Jan. 1, 20x1. Mobi Co. reported profit of P3,000,000 and declared and paid cash dividends of P500,000 in 20x1. How much are the (1) implied goodwill (negative goodwill) on the investment; (2) share in the

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter22: S Corporations

Section: Chapter Questions

Problem 23CE

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During 20X1, Craig Company had the following transactions: a. Purchased 300,000 of 10-year bonds issued by Makenzie Inc. b. Acquired land valued at 105,000 in exchange for machinery. c. Sold equipment with original cost of 810,000 for 495,000; accumulated depreciation taken on the equipment to the point of sale was 270,000. d. Purchased new machinery for 180,000. e. Purchased common stock in Lemmons Company for 82,500. Required: 1. Prepare the net cash from investing activities section of the statement of cash flows. 2. CONCEPTUAL CONNECTION Usually, the net cash from investing activities is negative. How can Craig cover this negative cash flow? What other information would you like to have to make this decision?
On January 1, 2013, Babe Company acquired a long term investment forP7,000,000, a 40% interest in Honey Company when the fair value of Honey’s net assets was P17,500,000. Honey Company reported the following net losses:2013 5,000,0002014 7,000,0002015 8,000,0002016 4,000,000 On January 1, 2015, Babe Company made cash advances of P2,000,000 toHoney Company. What amount should be reported in 2016 as loss on investment?
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At the beginning of the year 1, Down Under Company raises $60 million of equity and uses the proceeds to buy a fixed asset. Operating profits before depreciation (all received in cash) and dividends for the company are expected to be $40 million in year 1, $50 million in year 2, and $60 million in year 3, ath which point the company terminates. The firms pays no taxes. Assuming stright line depreciation to zero (of 20 million per year) the firm's profits thus equal $20 in year 1, $30 million in year 2 and $40 milion in year 3. If the cost of equity is 6%, the value of the firms equity is: Use the Discounted Dividend Valuation Method
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On January 1 2020, Philippine Airlines purchased 20% of Cebu Pacific's total outstandingordinary shares for two tenths of a billion peos. Net assets of the investee were fairly valuedexcept for one of its BUILDINGS, has a fair value of P5,000,000 greater than its carryingamount. The total carrying amount of all assets is P900,00,000.Assuming the building still has a remaining life of 10 years, how much “INVESTMENTINCOME” is debited to amortize the excess of cost for the year 2020?
On January 1, 2011, Pat Corporation paid $400,000 for purchase of Sad Corporation, when Sad'sstockholders" equity consisted of $300,000 capital stock and $200,000 retained earnings. Book valueswere equal to fair values of Sad's assets and liabilities, except for a building and land. The buildinghad a book value of $80,000, a fair value of $120,000, and a remaining useful life of eight years. Theland had a book value of $50,000 and a fair value of $150.000. Required : Calculate goodwill at the date of purchase of Sad Corporation