In 1/1/2024 Smart co. with owner equity (ordinary shares 1,500,0000, premium 2,500,000 and retained earning 1,800,000)purchased 10% of Welly co.with owner equity (ordinary shares 800,0000, premium700,000 and retained earning 1,000,000) byisuing 50,000 of its 25par and 5 market price. In that date the inventory of welly book value was 100,000 and market value140,000, equipment with book value 250,000 and fair market 320,000(7 years) In 31/12/2024 ART income was 280,000 beforerecorded any of DORPY and paid dividend 70,000, and income was 80,000 with 40,000 dividend, the market price share for Smartwas 125 and 75 for welly in 31/12/2024required: journalize all required entries for this investment in 01/01/2024 and 31/12/2024 with any elemination entries in31/12/2024

Detailed Journal Entries for Seesaw Co.'s Investment in MMI1. January 1, 2024:• Debit: Investment…

Answered: In 1/1/2024 Smart co. with owner equity…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On 1/1/2020, P acquired 80% of S. The implied value is 200000 JD and book value of equity is 120000 JD. The following table shows differences between FV and BV: Difference between FV & BV Inventory 20000 40000 Equipment (remaining life 5 years) Company P net income is 50000 JD and Company S net income is 40000 JD. Compute NCI in income. Select one: Oa 2400 Ob 2800 Oc.3200 O d. 3600
A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
On 1/5/2015 , K-mart. Co acquired 90% shares of the outstanding common shares of Tesco. for $360000 cash. At this date the common stock of Tesco was $ 300000 and retained earnings of $ 90000 and treasury stock of 30000. The income of Tesco before acquisition was 30000. If the company uses full year method, the differences between implied and book value is: Select one: a. 30000 b. 20000 c. 10000 d. None of the given choice
A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
1. On 1 January 2019, Pitty Ltd purchased 30% of the shares in Annah Ltd for P700, 000. At this date, Annah Ltd's net assets stood at P1, 4m. At 31 December 2019, Annah Ltd has net assets of P1, 5m. Pitty Ltd sold goods worth P160, 000 to Annah Ltd at a margin of 25%. Half of the goods remained in inventory at the year-end. Calculate the value of the investment in associate as at 31 December 2019?
The Ludel Company acquired the net assets of the Girl Conrad Company on January 1, 2018, and made the following entry to record the purchases:Current assets P100,000Equipment 150,000Land 50,000Buildings 300,000Goodwill 100,000Liabilities 80,000Common stock, P1 par 100,000Paid-in capital in excess of par 520,0001. Assuming that additional shares on January 1, 2020 would be issued on that date to compensate for any fall in the value of Ludel common stock below P16 per share. The settlement would be to cure the deficiency by issuing added shares based on their fair value on January 1, 2020. The fair price of the shares on January 1, 2020 was P10.What is the additional number of shares issued on January 1, 2020 to compensate for any fall in the value of the stock? a. 60,000b. 100,000c. 10,000d. 160,000 2. The Jonnie Company owns 75% of the Junior Company. On December 31, 2020, the last day of the accounting period, Junior sold to Jonnie a non-current asset for P200,000. The asset…
On January 2, 2022, S Company acquired 80% of the stocks of L Company for P2,000,000. On this date, L Company had P1,000.000 of Share Capital and P800,000 of Retained Earnings. The carrying values of the identifiable assets and liabilities of L are equal to their fair values. During the year. L ships merchandise to S costing P800.000 at 25% above cost. At the end of the year, records show the following: S Company L Company Inv. beg 350,000 120,000 Inv. end 400,000 5,500,000 2,500,000 3,250,000 1,680,000 200,000 Sales Purchases Operating Exp. Dividends paid 650,000 300,000 500,000 350,000 The ending inventory of S includes merchandise from L amounting to P50,000. The reported impairment of goodwill in 2022 is P20,000. The parent opted to measure NCI at fair value. In 2021, S Company sold inventory costing P50,000 to $ Company (90%- owned) for P100,000. By the end of the year, L sold 80% of the inventory. The elimination entries in 2022 would include: a. Credit to Cost of Sales, P100,000…
On January 2, 2022, S Company acquired 80% of the stocks of L Company for P2,000,000. On this date, L Company had P1,000.000 of Share Capital and P800,000 of Retained Earnings. The carrying values of the identifiable assets and liabilities of L are equal to their fair values. During the year. L ships merchandise to S costing P800.000 at 25% above cost. At the end of the year, records show the following: S Company L Company 120,000 Inv. beg 350,000 Inv. end 400,000 200,000 Sales 5,500,000 2,500,000 3,250,000 1,680,000 650,000 Purchases Operating Exp. Dividends paid 300,000 500,000 350,000 The ending inventory of S includes merchandise from L amounting to P50,000. The reported impairment of goodwill in 2022 is P20,000. The parent opted to measure NCI at fair value. How much is the Consolidated Inventory on December 31, 2022? a.590,000 b.560,000 c.587,500 d.600,000
On January 1, 2016, Ashland Company purchases a 25% interest in Cramer Company for $195,000. Ashland Company prepares the following determination and distribution of excess schedule:Price paid for investment . . . . . . . . . . . . . . . . . . . $195,000Less book value of interest acquired:Common stock ($5 par) . . . . . . . . . . . . . . . . . . . . $100,000Paid-in capital in excess of par . . . . . . . . . . . . . .. 200,000Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . .. 150,000Total stockholders’ equity. . . . . . . . . . . . . . . . . . . $450,000Interest acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . x 25% 112,500Excess of cost over book value (debit) . . . . . . . . $ 82,500Equipment [25% x $30,000 (10-year life)] . . . . . 7,500 DrGoodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75,000 DrThe…
Jack Co. acquired an 80% interest in Gill Co at book value on January 1, 2018. Intercompany purchases and sales and inventory data for 2018, 2019, 2020, and 2021 are as follows: Sale by Gill Co Intercompany Profit in Jack's Inventory at Dec 31 2018 $250,00 $20,000 2019 150,000 12,000 2020 310,000 25,000 Selected data from the financial statements of Jack and Gill at and for the year ended December 31, 2020, are as follows: Jack Gill Income Statement Sales 900,000 600,000 Cost of sales 625,000 300,000 Expenses 225,000…
On 1/1/2020, Company XX purchased 30% of the common shares of Company YY for $ 150,000 cash. On that date, Company YY had stockholders' equity of $ 250,000. On 1/1/2020 Company YY had the following: a- Overvalued inventory by $ 30,000 (all sold in 2020) [Overvalued means that BV is larger than FV] b- Unrecorded copyright valued at $ 120,000 (10 years expected useful life) In 2020, Company YY had net income $ 100,000 and did not pay dividends. Required a- Compute the goodwill for Company YY as on 1/1/2020 b- Record the journal entry for the investment on 1/1/2020 in Company ZZ books C- Record the journal entry on 31/12/2020 by Company XX for net income from YY d- Record the journal entry on 31/12/2020by Company XX for inventory adjustment e- Record the journal entry on 31/12/2020 by Company XX for copyright amortization adjustment

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