Subject: AFAR P72,000.b.171 On January 1, 20x8, Promo, Inc. purchased 70% of Set Corporation for P469,000. On thatdate the book value of the net assets of Set totaled P500,000. Based on the appraisal doneat the time of the purchase, all assets and liabilities had book values equal to their faird.P76,000.values except as follows:Book ValueFair ValueInventoryLandP100,000P120,000Equipment (useful life 4 years)75,000125,00085,000165,000The remaining excess of cost over book value was allocated to a patent with a 10-yearuseful life. During 20x8 Promo reported net income of P200,000 and Set had net income ofP100,000. What is consolidated net income if Promo recognizes income from Set using thesophisticated equity method?P 42,000P 70,000P 200,000P 270,000a.C.b.d.172. The equipment of a subsidiary acquired January 1, 20x5 has a cost and accumulateddepreciation of P300,000 and P170,000, respectively. The equipment is appraised atP320,000 at the acquisition date. Assuming the equipment has a 10-year remaining life,what is the worksheet elimination #1 adjustment to the equipment account in 20x7?a. P20,000 debitb. P20,000 creditС.P190,000 debitd. P 190,000 credit173. The equipment of a subsidiary acquired January 1, 20x5 has a cost and accumulateddepreciation of P300,000 and P170,000, respectively. The equipment is appraised atP320,000 at the acquisition date. Assuming the equipment has a 10-year remaining life,what is the worksheet elimination #1 adjustment to the accumulated depreciation accountin 20x7?

Income from subsidiary included in Net Income is called Consolidate Income.

date the book at the time of values except c Inventory Land Equipment The remaining useful life. Durin P100,000. What sophisticated ex P 42,00 b. P 70,00 2. The equipment depreciation of P320,000 at the what is the works a. a. P20,000 de b. P20,000 cre 73. The equipment depreciation of the

date the book at the time of values except c Inventory Land Equipment The remaining useful life. Durin P100,000. What sophisticated ex P 42,00 b. P 70,00 2. The equipment depreciation of P320,000 at the what is the works a. a. P20,000 de b. P20,000 cre 73. The equipment depreciation of the

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 8MC

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On January 1, 20X1, XYZ, Inc. purchased 70% of Set Corporation for $469,000. On that date the book value of the net assets of Set totaled $500,000. Based on the appraisal done at the time of the purchase, all assets and liabilities had book values equal to their fair values except as follows: Book Value Fair Value Inventory $100,000 $120,000 Land 75,000 85,000 Equipment (useful life 4 years) 125,000 165,000 The remaining excess of cost over book value was allocated to a patent with a 10-year useful life. During 20X1 XYZ reported net income of $200,000 and Set had net income of $100,000. What income from subsidiary did Promo include in its net income if Promo uses the simple equity method? a. $70,000 b. $42,000 c. $38,000 d. $110,000
As of December 31, 20X4, Blue Co.’s statement of financial position shows the book values of $15,000,000 for total assets and $12,000,000 for total liabilities. Also on December 31, 20X4, an appraisal shows the fair values of $18,500,000 for total assets and $14,000,000 for total liabilities. Green Co. purchased all of the net assets of Blue Co. on December 31, 20X4 for $5,500,000. What amount of goodwill, if any, did Green Co. record on the acquisition date? a. $2,500,000 b. $1,000,000 c. $4,500,000 d. $0
On January 1, 20X1, Promo, Inc. purchased 70% of Set Corporation for $469,000. On that date the book value of the net assets of Set totaled $500,000. Based on the appraisal done at the time of the purchase, all assets and liabilities had book values equal to their fair values except as follows: Book Value Fair Value Inventory $100,000 $120,000 Land 75,000 85,000 Equipment (useful life 4 years) 125,000 165,000 The remaining excess of cost over book value was allocated to a patent with a 10-year useful life. During 20X1 Promo reported net income of $200,000 and Set had net income of $100,000. What income from subsidiary did Promo include in its net income if Promo uses the simple equity method? a. $33,000 b. $42,000 c. $70,000 d. $100,000
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