FE holds investments in a number of subsidiaries and associate entities and madeone change to its holdings in 2021, which was the acquisition of LT. The statement offinancial position of the FE group as at 31 December 2021 and its comparative areshown below:2020Statement of financial position as at 31 December 2021ASSETSNon-current assetsProperty, plant and equipmentGoodwillInvestment in associatesR000R00024 0006 3005 20035 50042 50078 00020 2005 8004 70030 70031 70062 400Current assetsTotal assetsEQUITY AND LIABILITIESEquity attributable to owners of the parentShare capital (R1 ordinary shares)Share premiumRevaluation reserveRetained earnings15 00018 0001 0002 00012 50033 5009 2007 60022 600Non-controlling interestsTotal equity8 80031 40042 700 Non-current liabilitiesLong-term borrowingsCurrent liabilitiesTotal liabilities16 00019 30035 30018 00013 00031 000Total equity and liabilities78 00062 400Additional information:1. FE acquired 70% of the ordinary shares of LT on 1 July 2021 for a cashconsideration of R400 000 plus the issue of 1 million R1 ordinary shares in FE.On 1 July 2021 the fair value of an FE share was R1.50. On 1 July 2021 thefair values of the net assets of FE were as follows:R000Property, plant and EquipmentInventories1 000800Receivables900Cash and cash equivalents150Payables(850)2 000FE measured the non-controlling interests in LT at its proportionate share of the fairvalue of the net assets of LT at the acquisition date.1. The total comprehensive income attributable to non-controlling interests for theyear ended 31 December 2021 was R200 000.2. There were no disposals of property, plant and equipment in the year.Depreciation charged in the year ended 31 December 2021 was R1 500 000.3. FE's share of associates' profit after tax for the year ended 31 December 2021was R900 000.4. FE paid a dividend in the year of R1 million.Required:Prepare the following extracts from the consolidated statement of cash flows for theFE group for the year ended 31 December 2021, in accordance with IAS 7 Statementof Cash Flows:Cash flows from investing activities; andCash flows from financing activitiesii)

Cash flow statements include: Cash flow from operating activities Cash flow from Investing…

FE holds investments in a number of subsidiaries and associate entities and made one change to its holdings in 2021, which was the acquisition of LT. The statement of financial position of the FE group as at 31 December 2021 and its comparative are shown below: Statement of financial position as at 31 December 2021 ASSETS Non-current assets 2020 R000 R000 20 200 5 800 4 700 Property, plant and equipment Goodwill Investment in associates 24 000 6 300 5 200 35 500 42 500 78 000 30 700 31 700 Current assets Total assets 62 400 EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital (R1 ordinary shares) Share premium Revaluation reserve Retained earnings 15 000 18 000 1 000 2 000 12 500 33 500 9 200 42 700 7 600 22 600 Non-controlling interests Total equity 8 800 31 400

FE holds investments in a number of subsidiaries and associate entities and made one change to its holdings in 2021, which was the acquisition of LT. The statement of financial position of the FE group as at 31 December 2021 and its comparative are shown below: Statement of financial position as at 31 December 2021 ASSETS Non-current assets 2020 R000 R000 20 200 5 800 4 700 Property, plant and equipment Goodwill Investment in associates 24 000 6 300 5 200 35 500 42 500 78 000 30 700 31 700 Current assets Total assets 62 400 EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital (R1 ordinary shares) Share premium Revaluation reserve Retained earnings 15 000 18 000 1 000 2 000 12 500 33 500 9 200 42 700 7 600 22 600 Non-controlling interests Total equity 8 800 31 400

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 29E

See similar textbooks

Similar questions

On December 31, 2020, Luffy Company's investment in subsidiary account showed a balance of P400,000. This account is related to an acquisition entered at the beginning of 2020 of which Luffy acquired 80% controlling interest of an acquiree for a total consideration of P400,000, including acquisition related costs amounting to P50,000. Total comprehensive income of the acquiree at year-end amounted P1,000,000, and dividend received from the acquiree amounted to P700,000. The fair value of the investment at year-end is P600,000 and the estimated cost to sell amounted to P150,000. What should be the balance of the investment as at December 31, 2020 under cost model? a.400.000 b 500,000 с 450.000 d. 600,000
Gera Corporation owns two financial investments in the shares of listed companies. Details of which are as follows: Investment 1 – Acquired on September 1, 2020, at a cost of P50,000 with a Fair value of P60,000 at year-end for the purpose of trading. Investment 2 - Acquired on August 1, 2020, at a cost of P25,000 to hold indefinitely. Its fair value at year-end is P20,000. What are the amounts to appear in the Statement of Comprehensive Income for the year ended September 30, 2020?
The following are summarized Balance Sheets as on March 31, 2020 H. Ltd. acquired 80% shares in S Ltd. on October 1, 2019 for $ 2,000. At the date of acquisitionall the assets and liabilities of S Ltd were reflected at fair valueThe Retained earnings of S Ltd. on April 1, 2019 was $ 200H Ltd measures the Non Controlling Interest at its proportionate share of the acquiree's netidentifiable assets.S Ltd transferred goods to H Ltd at a transfer price of $ 300. The sales policy of H Ltd is to add50 % of mark up to its cost. Two-thirds remained in inventory at the year end. Required : Calculate goodwill at the date of acquisition and unrealized profit for holding company
DEF company acquired the assets and assumed liabilities of GHI Company on January 1, 2022 by paying P3,000,000 and issuing its own ordinary shares. The comparison of the acquirer’s balance sheet before and after business combination transaction is as follows: Balance sheet before Acquisition Balance Sheet after Acquisition Total Assets 13,545,000 17,595,000 Total Liabilities 3,760,000 ? Total SHE 9,785,000 ? The fair value of the identifiable net asset of the acquiree is P4,835,000 and the book value of acquiree’s liabilities amounting to P1,300,000 is lower compared to its fair value by P350,000. DEF company paid acquisition related costs amounting to P50,000. What is the fair market value of the ordinary shares issued by the acquirer? a. 2,500,000 b. 2,400,000 c. 2,480,000 d. 2,450,000
The parent company invested in walleye company when it consists Ordinary share 480,000 and Retained Earnings 200000 at 1/1/2019, on that date the excess of cost over book value is due to a $70,000 undervaluation of inventory, a $150,000 overvaluation of building and 100,000 undervaluation’s of equipment. The non-controlling of interest in the date of acquisitions was$160000 and goodwill 100000. During the first-year operation (2019) the subsidiary net income was 180000 and paid dividend 75,000- and second-year (2020) income was240,000 and 100000 dividends, all noncurrent assets have 10years useful life, answer the following questions: 1) The amount Cost of Parents’s purchase of Subsidiary on January 1, 2019 is: 2) The investment account in 31/12/2020 is: 3) The non-controlling interest in 31/12/2019 is: 4) The consolidate income in 31/12/2019 is: 5) The unamortized value in 31/12/2020 is:
Gera Corporation owns two financial investments in the shares of listed companies. Details of which are as follows: Investment 1 – Acquired on September 1, 2020, at a cost of P50,000 with a Fair value of P60,000 at year-end for the purpose of trading. Investment 2 - Acquired on August 1, 2020, at a cost of P25,000 to hold indefinitely. Its fair value at year-end is P20,000 What are the amounts to appear in the Statement of Financial position for the year ended September 30, 2020?
On 1 July 2020, Big Ltd acquired all the issued share capital of Small Ltd for cash for an amount of $1,050,000. On the date of the acquisition, the statements of the financial position of both entities are as follows: Big Ltd ($) Small Ltd ($) Assets Cash 21,000 10,500 Accounts receivable 315,000 115,500 Land 420,000 210,000 Plant 1,680,000 1,050,000 Investment in Small Ltd 1,050,000 3,486,000 1,386,000 Liabilities Accounts payable 126,000 63,000 Loans payable 840,000 315,000 Shareholders’ equity Share capital 2,100,000 420,000 Retained earnings 420,000 588,000 3,486,000 1,386,000 Required: a. Calculate the goodwill on acquisition assuming all net assets of small Ltd are recorded in fair value. b. Prepare consolidation journal entries. c.
On 1 July 2019, Besar Ltd acquired all of the shares (cum div.) of Kecil Ltd. The statement of financial position provided by the two companies at 1 July 2019 is as follows: Besar Ltd Kecil Ltd Shares in Kecil Ltd 367,000 - Plant 230,000 320,000 Accumulated depreciation (120,000) (40,000) Land - 12,000 Goodwill 10,200 2,000 Inventory 30,000 51,000 Receivables 40,000 42,000 557,200 387,000 Share capital 280,000 200,000 General reserve 44,000 33,000 Retained earnings 131,200 134,000 Liabilities 102,000 20,000 557,200 387,000 At the date of the business combination, all the identifiable assets and liabilities of Kecil Ltd had carrying amounts equal to their fair values except for: Fair value Plant $300,000 Inventory 31,000 Receivables 43,000 The plant had a further useful life of 5 years. It…
The following are the statements of financial position of Fish plc and its subsidiary Chips Ltd as at 30 September 2020 [image] Notes to the Statements of Financial Position: Fish Plc acquired 9,000,000 ordinary shares (75%) in Chips Ltd on October 1 2019 when the retained earnings of Chips Ltd were £4,800,000. The non-controlling interests in the net assets of Chips Ltd at the date of acquisition were independently valued at £2,800,000. Goodwill was impaired in the amount of £40,000 for the year ended 30 September 2020 Required: A. Calculate the goodwill on acquisition of Chips Ltd. B. Account for the impairment of £40,000.
On January, 2020, P Company acquired 90% of S Company in exchange for 5,400 shares of P10 par common stock having a market value of P120,600. P and S condensed balance sheet where as follows: Requirements: Compute the following:1. Partial goodwill on Jan. 1, 20202. Non-controlling interest (in net assets) on Jan. 1, 20203. Consolidated Retained Earnings, Jan. 1, 20204. Equity Holders of Parent - Retained Earnings, Jan. 1, 20205. In addition to the information, assuming that on Dec. 31, 2020, the following results were given: Dividends Paid Net IncomeP Company P 15,000 P 30,200S Company 4,000 9,400 Using cost method to record results of operations, compute the Investment balance on Dec. 31, 20206. Dividend income for 2020 using cost method.7. Non-controlling interest in Net Income on Dec. 31, 2020.8. Non-controlling interest on Dec. 31, 2020.9. Profit for the period attributable to Equity Holders of Parent on Dec. 31, 2020.10. Consolidated/Group Net Income on Dec. 31, 2020.11.…
On December 1, 2020, Stan Lee Company acquired all of Marvel Inc.’s P2,150,000 identifiable assets and P530,000 liabilities. Book values of the Marvel’s assets and liabilities approximate their fair values except for an overvalued fixture. To acquire the net assets of Marvel, Stan issued its own shares of stock with a market value of P1,715,000 plus cash of P375,000.A contingent consideration of P150,000 is established on the date of acquisition. The business combination resulted to a P650,000 goodwill.Assuming Stan had total assets of P4,890,000 and total liabilities of P2,731,000 prior to the combination, how much is the total assets after the business combination if no additional cash payments were made, but expenses were incurred for related costs amounting to P28,000?After the business combination, how much is the increase in the liabilities of Stan?
Dog Ltd acquired all the issued share capital of Fish Ltd on 1 July 2019 for cash $2,250,000. At the date of acquisition, all assets of Fish Ltd were recorded at fair value, except for land, which had a carrying amount of $1,000,000 and its fair value was $1,155,000. The recorded balances of equity in Fish Ltd as at 1 July 2019 were: Share capital $1,360,000 Retained earnings $ 170,000 $1,530,000 Present the acquisition analysis