9. ABC paid finder's fees of P80,000, legal fees of P26,000, audit fees related to stock issuance of P20,000, stock registration fees of P10,000 and stock listing application fees of P8,000. Based on the given information, under the acquisition method, what amount relating to business combination would be charged to expens
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- RIVERDALE paid finder's fees of P80,000, legal fees of P26,000, audit fees related to stock issuance of P20,000, stock registration fees of P10,000 and stock listing application fees of P8,000. Based on the given information, under the acquisition method, what amount relating to business combination would be charged to expense?Conroy Financial paid $530,000 for a 20% investment in the common stock ofMaverick, Inc. For the first year, Maverick reported net income of $270,000, and at year-enddeclared and paid cash dividends of $115,000. On the balance-sheet date, the fair value of Conroy’s investment in Maverick stock was $410,000.Requirements1. Which method is appropriate for Conroy to use in its accounting for its investment inMaverick? Why?2. Show everything that Conroy would report for the investment and any investment revenuein its year-end financial statements.The following are the revenue items in the Income Statement of a domestic corporation for the year 2021:Gain from sale of office equipment, P20,000Gain from sale of land not used in business (selling price of P300,000), P100,000Gain from sale of shares of stock directly to the buyer, P50,000Gain from sale of shares of stock through the stock exchange (selling price, P200,000), P10,000Bad debt recovery, P50,000How much is the total capital gains tax? a. P21,250 b. P25,500 c. P60,000 d. P45,000
- On 1/1/2020, ABC Corporation balance sheet included the following accounts: Patents $100,000, Bonds Payable $40,000, Common Stock $10,000, Retained Earnings $50,000. Book values of assets and liabilities were equal to their fair values. XYZ Corporation acquired 100% of the common stock of ABC Corporation on 1/1/2020 for $120,000 Cash. Which of the following entries was prepared to record the acquisition on XYZ's books? Patents? [Debit or credit by what amount] Bonds Payable? [Debit or credit by what amount] Cash? [Debit or credit by what amount] Investment in Subsidiary? [Debit or credit by what amount] Goodwill? [Debit or credit by what amount] Gain on Acquisition of Business? [Debit or credit by what amount]In 20x3, SKEPTICAL incurred constructive obligation of ₱480,000 in favor of QUESTIONING and made payments of ₱320,000 on behalf of QUESTIONING. In relation to the investment in QUESTIONING shares, what amounts should SKEPTICAL Co. report in its statement of profit or loss in the following years? 20x1 20x2 20x3 20x4 a. (1,120,000) (280,000) (800,000) 600,000 b. (1,120,000) (400,000) (800,000) 600,000 c. (1,120,000) (280,000) 0 800,000 d. (800,000) 0 0 800,000Assume the following independent cases:A. At the beginning of the year, a check was issued for P400,000 as payment for a piece of land, and the buyer assumed the liability for the unpaid taxes at the end of the year, P10,000 and those assessed for the current year at P9,000.B. A company issued 14,000 ordinary shares (P10 par) with a market value of P60 per share (based upon a recent sale of 100 shares) for the land. The land was recently appraised at P800,000 by independent and competent appraisers.C. A company rejected an offer to purchase the land for P8,000,000 cash two years ago. Instead, the company issued 100,000 ordinary shares for the land (market value of the ordinary share, P78 each based on several recent large transactions and normal weekly stock trading volume).D. A company purchased land by signing a note with the seller, requiring P100,000 down payment, payment of P120,000 one year from purchase, and P80,000 three years from purchase. The note is non-interest bearing,…
- 2. On January 1, 20x1, an entity purchased marketable equity securities for P2,500,000. The entity paid commission and taxes of P190,000. The equity securities do not qualify as financial asset held for trading. The entity made irrevocable election to present unrealized gain and loss in other comprehensive income. The securities have a market value of P2,600,000, and P2,750,000 on December 31, 20x1 and December 31, 20x2. O n July 1, 2022, half of the securities are sold for P1,400,000. On December 31, 20x2, how much shall be shown in the statement of comprehensive income as unrealized gain/ loss? (sample answer: 10,500 UG or 10,500 UL)1. On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets andliabilities of Ana Company. Sara issued P400 in long-term liabilities and 40 shares of common stockhaving a par value of P1 per share but a fair value of P10 per share. Sara paid P20 to lawyers,accountants and brokers for assistance in bringing about this purchase. Another P15 was paid inconnection with stock issuance costs. Prior to these transactions, the balance sheets for the twocompanies were as follows: Sara AnaCash P180 P 40Accounts receivable 810 180Inventory 1,080 280Land 600 360Buildings (net) 1,260 440Equipment (net) 480 100Accounts Payable ( 450) ( 80)Long-term liabilities (1,290) (400)Common stock, P1 par (330)Common stock, P20 par (240)Additional paid-in capital (1,080) (340)Retained earnings (1,260) (340)In Sara’s appraisal of Ana, three assets were deemed to be undervalued in the books of Ana: Inventoryby P10, Land by P40 and Buildings by P60.2. Compute the amount of…1. On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets andliabilities of Ana Company. Sara issued P400 in long-term liabilities and 40 shares of common stockhaving a par value of P1 per share but a fair value of P10 per share. Sara paid P20 to lawyers,accountants and brokers for assistance in bringing about this purchase. Another P15 was paid inconnection with stock issuance costs. Prior to these transactions, the balance sheets for the twocompanies were as follows: Sara AnaCash P180 P 40Accounts receivable 810 180Inventory 1,080 280Land 600 360Buildings (net) 1,260 440Equipment (net) 480 100Accounts Payable ( 450) ( 80)Long-term liabilities (1,290) (400)Common stock, P1 par (330)Common stock, P20 par (240)Additional paid-in capital (1,080) (340)Retained earnings (1,260) (340)In Sara’s appraisal of Ana, three assets were deemed to be undervalued in the books of Ana: Inventoryby P10, Land by P40 and Buildings by P60.1. If the transaction is…
- Assume the following independent cases: (a) At the beginning of the year, a check was issued for P400,000 as payment for a piece of land and the buyer assumed the liability for unpaid taxes in arrears for the previous year, P10,000 and those assessed for the current year, P9,000.(b) A company issued 14,000 ordinary shares (P50 par) with a market value of P60 per share (based upon a recent sale of 100 shares) for the land. The land was recently appraised at P800,000 by independent and professional appraisers.(c) A company rejected an offer to purchase the land for P8,000,000 cash two years ago. Instead, the company issued 100,000 ordinary shares for the land (market value of the ordinary share, P78 each based on several recent large transactions and normal weekly stock trading volume).How much is the cost of land acquired in (a), (b), and (c), respectively? a. 419,000; 800,000; 7,800,000 b. 410,000; 800,000; 7,800,000 c. 410,000; 840,000; 7,800,000 d. 419,000; 840,000;…On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…