Exercise 10-6 (Algo) Goodwill (LO10-1]On March 31, 2021, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $18,500,000 in cash.The book values and fair values of Barney's assets and liabilities were as follows:Book ValueFair ValueCurrent assets$ 7,500,00012,500,0001,150,0005,500,0007,500,000Property, plant, and equipmentOther assets$ 9,000,00015,500,000Current liabilitiesLong-term liabilities1,650,0005,500,0007,000,000Required:Calculate the amount paid for goodwillI.* Answer is complete but not entirely correct.Goodwill$ 20,150,000 x

In accounting, goodwill is usually defined as the worth of a company that surpasses its assets less…

Exercise 10-6 (Algo) Goodwill [LO10-1] On March 31, 2021, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $18,500,000 in cas The book values and fair values of Barney's assets and liabilities were as follows: Book Value $ 7,500,000 12,500,000 1,150,000 5,500,000 7,500,000 Fair Value Current assets $ 9,000,000 15,500,000 1,650,000 5,500,000 7,000,000 Property, plant, and equipment Other assets Current liabilities Long-term liabilities Required: Calguloto tho

Exercise 10-6 (Algo) Goodwill [LO10-1] On March 31, 2021, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $18,500,000 in cas The book values and fair values of Barney's assets and liabilities were as follows: Book Value $ 7,500,000 12,500,000 1,150,000 5,500,000 7,500,000 Fair Value Current assets $ 9,000,000 15,500,000 1,650,000 5,500,000 7,000,000 Property, plant, and equipment Other assets Current liabilities Long-term liabilities Required: Calguloto tho

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter6: Corporations: Redemptions And Liquidations

Section: Chapter Questions

Problem 1BCRQ

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16 All the issued and outstanding common stock of MOA Company were brought by Aura Company on October 1, 2020 for P700,000. The assets and liabilities of Aura Company were: Cash 50,000 Accounts receivable (net of P25,000 allowance for bad debts) 250,000 Inventory 150,000 Property & Equipment (net of P100,000, allowance for depreciation) 300,000 Accounts payable 130,000 On October 1, 2020 the fair value of the following assets was as follows: Accounts receivable (net) 235,000 Inventory 130,000 Property & equipment (net) 400,000 There is an unrecorded warranty liability on prior-product sales estimated P20,000 discounted cash flow based on estimated future cash flows. The amount of goodwill as a result of the business combination should be: Group of answer choices 65,000 100,000 35,000 Zero
L2-4 Awe Company pays CU500,000,000 for a 30% interest in Groy Company on July 1, 19x2 when the book value of Groy Company's net assets equals fair value. Awe Company amortizes any goodwill from this investment over 20 years. Information related to Groy Company is as follows: 31 Desember 19x1 31 Desember 19x2 Share capital, nominal IDR 1,000 Rp600.000.000 Rp600.000.000 Retained earning 400.000.000 500.000.000 Total Shareholders' Equity 1.000.000.000 1.100.000.000 Net profit earned during the year 19x2 200.000.000 Dividend for the year 19x2 (paid on March 1 of Rp. 50,000,000 and September 1 of Rp. 50,000,000) 100.000.000 Required: calculate Awe Company's revenue from Groy Company for the year 19x2
38. On October 1, 2021, a company declared to its shareholders a property dividend in the form of pieces of equipment with carrying amount of P960,000 (acquired on October 1, 2015 for P2,400,000). The dividends are for distribution on January 31, 2022. The company provided the following estimate of the asset’ fair value: October 1, 2021 P1,050,000 December 31, 2021 1,020,000 January 31, 2022 1,110,000 What amount will be reported in 2021 statement of profit or loss as a result of the foregoing transactions?
PROBLEM 32Guillen Company acquired 30% of ABC Corporations share for P8,000,000 on July 1, 2020. ABC Corporation’s identifiable net assets on the date of acquisition are P20,000,000. Guillen believes that the investee has known goodwill and the fair value of the corporation's net assets is the same as itscarrying amount except for the following: a. Equipment is undervalued by P2,000,000.b. Inventory’s fair value is P2,000,000 greater than its carrying amount. The equipment has a remaining life of 4 years and depreciated using the straight-line method. At the end of 2020, all inventories at the acquisition date are entirely sold. On November 30, ABC Corporation pays a P2,000,000 dividend to its shareholders. During the year,ABC Corporation reported a net income of P5,000,000, 40% of these were earned in the first half ofthe year. The fair value of ABC Corporation's shares held by Guillen at the end of 2020 is P8,250,000. Requirements:1. Prepare the necessary journal entries to record…
12. The Polythene Pam Company purchases P2,000,000 of bonds. The asset has been designated as one at fair value through profit and loss. One year later, 10% of the bonds are sold for P400,000. Total cumulative gains previously recognized in Polythene Pam's financial statements in respect of the asset are P100,000. What is the amount of the gain on disposal to be recognized in profit or loss? Group of answer choices P90,000 P100,000 P190,000 P200,000
Hw.27. Entity A entered into a sale and repurchase agreement for its head office on 1 January 2022, selling the office to Bank B for $78,560,000. On the same date, the head office had a fair value of $97,800,000. Entity A will continue to use the head office for the next 2 years and has the option to buy back the property for $93,765,779, based on an effective interest rate of 9.25% per year over the next 2 years. Property prices are expected to increase over the next 2 years. REQUIRED: Measure the net amount to be shown in the Statement of Profit or Loss for the year ended 31 December 2022. 1. $7,938,979 Expense 2. $19,240,000 Expense 3. $0 4. $7,266,800 Expense 5. None of them.
PROBLEM 35At the beginning of 2018, Esterlina Corporation purchased 40% of the ordinary shares outstanding of Mary Grace Incorporated for P15,000,000 when the net assets of Mary Grace Incorporated amounted to P30,000,000. At the acquisition date, the carrying amounts of the identifiable assets and liabilities of Mary Grace Incorporated were equal to their fair value, except for the following: a. Equipment whose fair value was P7,000,000 greater than its carrying amount.b. Inventory whose fair value was P2,500,000 greater than its carrying amount. The equipment has a remaining life of 4 years, and the inventory was all sold during 2013. Mary Grace Incorporated has two classes of shares: Ordinary shares (par value, P100), 300,000 shares outstanding, 15% cumulative preference shares (par value, P50), 100,000 shares outstanding. The investee reported the following net income (inclusive of enter-company transactions) and payment of cash dividend: 2018…
#9 YOO-YOO Corporation has the following investment which was held throughout 2021–2022: Fair Value Cost 12/31/21 12/31/22 Equity investment $836000 $1128000 $1060000 What amount of gain or loss would YOO-YOO Corporation report in its income statement for the year ended December 31, 2022, related to its investment, if the fair value method of accounting was used? $292000 gain. $68000 loss. $68000 gain. $224000 gain.
5. ABC Company purchased Tara Company for P8, 000,000 cash. Tara Company had total liabilities of P3, 000,000. ABC Company’s assessment of the fair value is obtained when it purchased Tara Company is as follows:Cash 1, 000,000Inventory 500,000In-process research and development 5, 000,000Assembled workforce 1, 200,000What is the goodwill arising from the acquisition?
23 The Phoenix Company accounts for non-current assets using the revaluation On 30 June 2020 Phoenix classified a non-current asset as held for sale in accordance with PFRS5. At that date the property's carrying amount was P300,000 and the balance on the revaluation reserve was P30,000. Fair value was estimated at P280,000 and the costs to sell at P20,000. The value in use is not determinable. The asset is still unsold at 31 December 2020. What amount should be included in the entity's statement of profit or loss for the year ended 31 December 2020?
12. On May 1, Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 31, 2021. The following additional facts pertain to the transaction: The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. The book value of Footwear's assets totaled $48 million on the date of the sale. Footwear's operating income was a pre-tax loss of $10 million in 2021. Foxtrot's income tax rate is 25%. In the income statement for the year ended December 31, 2021, Foxtrot Co. would report: Multiple Choice All income taxes combined into one line item. Income taxes separated for continuing and discontinued operations. Income taxes reported for income and gains only. None of these answer choices are correct.
MC 5 P327On April 1, PP, Inc., exchanges P430,000 fair-value consideration for 70% of the outstanding stock of RR Corporation. The remaining 30% of the outstanding shares continued to trade at a collective fair value of P165, 000. RR's identifiable assets and liabilities each had book values that equaled their fair values of April 1 for a net total of P500,000. RR generated annual (12-month) revenues of P600,000 and expenses of P360,000 and paid no dividends. On a December 31 consolidated balance sheet, what should be reported as non-controlling interest?MC 6 P327-28January 1, 20x4, Payne Corp. purchased 70% of Shayne Corp's P10 par common stock for P900,000. On this date, the carrying amount of Shayne's net assets was P1,000,000. The fair values of Shayne's identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net), which were P200, 000 in excess of the carrying amount. For the year ended December 31, 20x4, Shayne had net income of…