a) Discuss the related party disclosures required in the financial statements of Terrier plc only. b) Explain why such disclosures are important to the user of financial statements
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a) Discuss the related party disclosures required in the financial statements of Terrier plc only.
b) Explain why such disclosures are important to the user of financial statements
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- Exercise 4 – 6On January 1, 2020, Blunt Co. purchased 50,000 ordinary shares of Powter Co. at ₱16 per share. The shares are classified as financial asset at fair value through other comprehensive income. Powter declared and paid dividends of ₱4 and ₱5 per share in 2020 and 2021, respectively. At the end of 2020 and 2021, Powter’s shares were trading at ₱17 and ₱14, respectively.1. Determine the dividend income recognized by Blunt on the equity instrument in 2020 and 2021.2. Determine the carrying amount of the equity instrument on Blunt’s statement of financial statement on December 31, 2020 and December 31, 2021.3. Determine the unrealized gain or loss on change in fair value recognized by Blunt in its profit or loss statement for the year ended December 31, 2020 and December 31, 2021.4. Determine the cumulative balance of the unrealized gain or loss recognized in the other comprehensive income of Blunt’s shareholders’ equity on December 31, 2020 and December 31, 2021.Measurement – IFRS 9 Financial InstrumentsStartUp Ltd. acquires corporate bonds in the amount of five million Euro on the capital market and intends to holds the financial instruments for five years until the liquidity is needed to invest in its infrastructure.Assume the financial instruments bear the character of debt instruments categorized in a • mixed business model• at fair value through other comprehensive incomePlease explain, how StartUp Ltd. needs to measure the financial instruments initially and in subsequent periodsBecker CPA Review 18-9 Adams, Beck, and Carr organized Flexo Corp. with authorized voting common stock of $100,000. Adams received 10% of the capital stock in payment for the organizational services that he rendered for the benefit of the newly formed corporation. Adams did not contribute property to Flexo and was under no obligation to be paid by Beck or Carr. Beck and Carr transferred property in exchange for stock as follows: Adjusted Basis Fair Market Value Percentage of Flexo Stock Acquired Beck $5,000 $20,000 20% Carr 60,000 70,000 70% What amount of gain did Carr recognize from this transaction? a.$40,000 b.$15,000 c.$10,000 d.$0
- Exercise 3 – 4 (Issuance of Share Capital with Stated Value in Exchange for Various Considerations) The Estefanny Corporation is authorized to issue 500,000 shares of ordinary share capital with a stated value of P25. The following transactions have taken place in relation to the share capital: Issued 122,000 shares for cash at stated Issued 2,300 shares to attorneys for services in securing corporate charter and for preliminary legal costs of organizing the corporation. The value of the services was P150,000. Issued 2,000 shares to the corporate promoters. Each ordinary share is selling at P24 on this Issued 10,000 shares in exchange for land valued at P250,000. Issued for cash 50,000 shares at P22 per Instructions: Prepare the journal entries to record the preceding transactions, including authorized capital, using the memorandum entry method.Question 2 Week 8 The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares each valued at $1.50. The summary statement of the financial position of the subsidiary company immediately following the acquisition is: Fair value of assets acquired $2,640,000 Fair value of liabilities acquired $720,000 Total shareholders’ equity of the subsidiary company $800,000 Retained earnings of the subsidiary company $1,120,000 Required: (a) Pass the necessary journal entry to record the acquisition (b) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition (c) Pass the necessary consolidation entry to eliminate the subsidiary by the parent company (d) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchase consideration paid was $1,000,000 cash and 400,000 shares each valued at $1.50Exercise 3 – 2 (Issuance of Par Value Share Capital for Cash, Services, and Non-cash Assets) The Stephen Corporation was organized on March 1, 2019, with an authorized share capital of 500,000 ordinary shares, par value of P20. Thereafter, the following transactions took place: March 1 The incorporators acquired 200,000 shares at P30 per share. 25 Issued 5,000 shares for the services rendered by the lawyer during the period of incorporation. The fair value of such services is P135,000. April 28 Issued 14,500 shares in exchange for equipment valued at P377,000. Instructions: Prepare the journal entries to record the authorized share capital and the subsequent transactions assuming the corporation uses the: memorandum entry method journal entry method
- 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)PROBLEM 1: You were assigned to audit the shareholders’ equity of Glory Inc. for the year ended December31, 2019. Glory Corp. was incorporated in early 2018 when it was authorized by SEC to issue 500,000 ordinary shares (P10 par) and 100,000 convertible preference shares (P20 par). The following schedule reflects the company’s capital balances as of December 31, 2018: Ordinary shares, 100,000 shares issued during the company’s P 1,400,000 incorporation in exchange of a land with a fair value of P1.4 M. Preference shares, 50,000 shares issued during the company’s 2,500,000 incorporation at P50 per share. Each preference share is convertible to four ordinary shares Retained earnings, which is the company’s net income in 2018 540,000 Total shareholders’ equity P 3,440,000 Your inquiries and investigation revealed the following transactions, which occurred in 2019: On January 15, the company reacquired 20, 000 ordinary shares (from the 2018 issue) at P22 per share and reverted…nEED IN 10 MINUTES 9. 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. On July 1, 2022, half of the securities are sold for P1,400,000. On July 1, 2022, the net increase/ decrease in retained earnings account is (sample answer: 10,500 increase or 10,500 decrease)
- Section 11 of Securities Act of 1933: Liability Exposure. Chriswell Corporationdecided to raise additional long-term capital by issuing $20 million of 12 percent subordinated debentures to the public. May, Clark & Company, CPAs, the company’s auditors, wereengaged to examine the June 30, 2018, financial statements, which were included in thebond registration statement.May, Clark & Company completed its examination and submitted an unmodified auditors’ report dated July 15, 2018. The registration statement was filed and became effectiveon September 1, 2018. On August 15, one of the partners of May, Clark & Company calledon Chriswell Corporation and had lunch with the financial vice president and the controller. He questioned both officials on the company’s operations since June 30 and inquiredwhether there had been any material changes in the company’s financial position since thatdate. Both officers assured him that everything had proceeded normally and that the financial…Question 39 Company X ows 10,000,000 shares of voting common stock of a foreign entity that it accounts for using the equity method of accounting. The 10,000,0000 shares constitute 40% of the oustanding shares of voting common stock of the foreign entity. The foreign entity has its own functional currency, which is differenet than Company X's reporting currency.. The cumulative translation adjustment as of December 31, 2020 in Company X's consolidated financial statements relating ot this investee is $ 1.5 million debit balance. Subequent to year-end, Company X sells 2,000,000 of the shares held in this foreign entity to outside investors. As a result of this transaction, Company X now owns 32% of the foreign entity's' voting common stock and continues to apply the equity method. What is the impact of this sale transaction on Company X's cumulative translation adjustment account? There is no impact $480,000 debit $480,000 credit $300,000…Situation 2Pina, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles’s 29,700 outstanding shares of common stock at a total cost of $ 10 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $ 33,000 to all stockholders. On December 31, Seles reported a net income of $ 79,200 for the year.Prepare all necessary journal entries in 2020 for both situations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) i cant figure out the Account Titles and Explanation