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- Pal Corporation acquired a 60% interest in Sun Corporation on January 1, 2020, at a cost equal to book value and fair value. Sun reports net income of $880,000 for 2020. Sun regularly sells merchandise to Pal at 120% of Sun’s cost. The intercompany sales information for 2020 is as follows: Selling price for intercompany transaction $672,000 Value of inventory unsold by Pal 132,000 Instructions: Determined unrealized profit in Sun as at 31 December 2020 Compute Pal income from Sun as at 31 December 2020On January 1, 2022, P Company acquired 80% of S Company for P2,000,000. The fair value of identifiable net assets is P1,800,000. NCI is measured at fair value. During 2022, P Company ships merchandise to S Company costing P800, 000 at 25% above cost. Additional data are as follows: P Company S Company Sales 5,500,000 2,500,000 Cost of Sales 3,200,000 1,600,000 Operating Expense 650,000 300,000 The ending inventories of S Company includes merchandise from P Company amounting to P50,000. Impairment of goodwill is P20,000. (INPUT YOUR ANSWERS IN FIGURES. DO NOT PUT ANY COMMA, PESO SIGN, DECIMALS, AND EXTRA SPACES) Consolidated cost of sales is reported at The net income attributable to parent isAn entity accounts for non-current assets using the revaluation model. On 30 June 2020, the entity classified two items of non-current assets as held for sale in accordance with PFRS5. The following information relates to these assets: Asset 1 Asset 2 Carrying amount before classification as held for sale P400,000 P300,000 Revaluation surplus before classification as held for sale 60,000 30,000 Fair value, 30 June 2020 450,000 260,000 Estimated costs to sell 20,000 12,000 The balance of revaluation surplus as of 30 June 2020 after classification of the assets as held for sale is
- An entity accounts for non-current assets using the revaluation model. On 30 June 2020, the entity classified two items of non-current assets as held for sale in accordance with PFRS5. The following information relates to these assets: Asset 1 Asset 2 Carrying amount before classification as held for sale P400,000 P300,000 Revaluation surplus before classification as held for sale 60,000 30,000 Fair value, 30 June 2020 450,000 260,000 Estimated costs to sell 20,000 12,000 The total expense to be recognized in profit or loss related to these assets isStar Company has outstanding a P6,000,000 note payable to an investment entity. Accrued interest payable on this note amounted to P600,000. Because of financial difficulties, the entity negotiated with the investment entity to exchange inventory of machine art to satisfy the debt. The inventory transferred is carried of P3,600,000. The estimated retail value of the inventory is P5,600,000. The perpetual inventory system is used. What amount of pretax gain on extinguishment should Star Company report as component of income from continuing operations in 2017?AAA textiles limited factors 500,000 of A/R with BBB Factors Limited on a with recourse basis. The receivable records are transferred to BBB factors limited which will receive the collections. BBB factors limited assess a finance charge of 3% of the amount of A/R and retains an amount equal to 5% of the A/R. It is determined that the fair value of the recourse obligation is 6,000. Determine the amount that should be presented in the profit or loss by AAA as a result of the factoring transaction.
- The following are several figures reported for Allister and Barone as of December 31, 2021: AllisterBaroneInventory$400,000$200,000Sales 800,000 600,000Investment incomenot given Cost of goods sold 400,000 300,000Operating expenses 180,000 250,000 Allister acquired 70 percent of Barone in January 2020. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $65,000 that was unrecorded on its accounting records and had a five-year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2021, Barone sells inventory costing $120,000 to Allister for $160,000. Of this amount, 20 percent remains unsold in Allister's warehouse at year-end. Determine balances for the following items that would appear on Allister's consolidated financial statements for 2021:In 2019, entity A sold goods to its subsidiaries (entities B and C) for P500,000 and P400,000, respectively. In 2019, entity A sold goods to its associates (entities D and E) for P50,000 and P40,000 respectively. On 31 December 2019 entities B, C, D and E owed entity A P200,000, P100,000, P20,000 and P10,000, respectively. The terms and conditions of the sales to entities B, C, D and E are the same as for sales to independent third parties, ie list price on 30 days’ interest-free credit. In 2019, entity A purchased raw materials from its owner (Mr. A) for P125,000. Mr. A supplies raw materials to entity A at a discount of 20 per cent on the price at which he supplies other customers that purchase similar quantities of raw materials. In common with other customers, Mr. A supplies entity A with raw materials on 30 days’ interest-free credit. On 31 December 2019 entity A reported that it had reimbursed Mr. A’s expenses of P400,000 for leisure trips. How much is the total amount of related…Firm OCS sold business equipment with a $23,000 initial cost basis and $10,015accumulated tax depreciation. In each of the following cases, compute OCS’srecaptured ordinary income and Section 1231 gain or loss on the sale.Required:a. Amount realized was $10,600.b. Amount realized was $13,600.c. Amount realized was $18,100.d. Amount realized was $26,100.Note: For all requirements, losses should be indicated with a minus sign. Leave nocell blank. Enter "0" for cells that do not have an amount.
- ABC Corp. Acquired a 70% interest in GHI Corp on January 2, 2021 for P936,000 when GHI’s net assets had a book value and fair value of P1,580,000. During 2021, ABC sold inventory items that cost P1,560,000 to GHI for P2,080,000 and GHI’s inventory at December 31, 2021 included 1/2 of the merchandise. DEF also sold to ABC an inventory for P30,000 with a cost of P25,000, 70% were sold to unaffiliated customers. ABC Corp. Reported separate income from its own operation of P1,170,000 and GHI reported a net loss of P390,000. Compute for the consolidated net income.Illustration 1. Measuring Goodwill/Gain on Bargain PurchaseOn January 1, 2021, Amahan Co. acquired all of the assets and assumed all of the liabilities of Anak, Inc. As of this date, the carrying amounts and fair values of the assets and liabilities of Anak acquired by Amahan are shown below: On the negotiation for the business combination, Amahan Co. incurred the followingtransaction costs: P25,000.00 for legal fees; P 75,000.00 for accounting fees and P 50,000.00 for consultancy fees. Case 1: Amahan Co. paid P1,000,000.00 cash and P 350,000.00 land with fair value ofP500,000.00 as consideration for the assets and liabilities of Anak, Inc.1. How much is the transaction costs incurred during the business combination?a. 50,000.00b. 75,000.00 c. 125,000.00d. 150,000.00 2. How much is the Consideration Transferred?a. 1,000,000.00b. 1,350,000.00c. 1,500,000.00d. 1,850,000.00 3. How Much is the Non-Controlling Interest in the acquiree?a. 0.00b. 150,000.00c. 310,000.00d. 500,000.000Illustration 1. Measuring Goodwill/Gain on Bargain PurchaseOn January 1, 2021, Amahan Co. acquired all of the assets and assumed all of the liabilities of Anak, Inc. As of this date, the carrying amounts and fair values of the assets and liabilities of Anak acquired by Amahan are shown below: On the negotiation for the business combination, Amahan Co. incurred the followingtransaction costs: P25,000.00 for legal fees; P 75,000.00 for accounting fees and P 50,000.00 for consultancy fees. 1. How much is the goodwill (gain on bargain purchase) on the businesscombination?a. (465,000.00)b. 185,000.00c. (190,000.00)d. 310,000.00