Oman Gulf purchased 15% shares of Oman Construction. Oman Gulf's intention is only to make profit from the shares it bought from Oman Construction. Fair value of the shares is known to both companies. What accounting method for equity securities should Oman Gulf use? a. Fair Value Method b. Full Consolidation Method c. Equity Method d. Cost Method
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- Company A buys 15% of common stocks of Company B. Company A provides financial support to Company B, which is unavailable to finance its activities. Company A should record its investment in Company B as: a. Available for sale investment b. Trading investment c. As Investment using the equity method d. As Investment preparing consolidated financial statementsMajan SAOG purchased 25% shares of Teejan SAOG. Majan SAOG also intends to influence and control the affairs of Teejan SAOG business. What accounting method for equity securities should Majan use? a. Fair Value Method b. Cost Method c. Full Consolidation Method d. Equity MethodHow much is the unrealized gain (loss) accumulated in equity as of December 31, 20x2? Karen Co. purchased the following equity securities on January 1, 20x1 for a total amount of P360,000. Cost Alaska Co. preference shares P200,000 160,000 Valdez Co. ordinary shares Totals P360,000 The shares did not qualify for recognition as held for trading, thus they were classified as investment in equity securities measured at fair value through other comprehensive income. On December 31, 20x1, the portfolio of Karen Co. comprised the following. Fair value - 12/31/x1 Alaska Co. preference shares P240,000 60,000 Valdez Co. ordinary shares Total P300,000 On December 31, 20x2, the portfolio of Karen Co. comprised the following: Fair value - 12/31/x2 Alaska Co. preference shares P220,000 180,000 Valdez Co. ordinary shares Total P400,000 On February 2, 20x3, all of the Alaska Co. preference shares were sold for P160,000 net of transaction costs. 0 100,000 40,000 O (40,000)
- 1. How much is the realized gain or loss on the sale of Djursholm Corp. ordinary shares on April 1, 2022? 2. The 2,100 ordinary shares of Stockholm Corp. purchased on May 1, 2022, should be initially measured at how much? 3. Sweden’s December 31, 2022, statement of financial position should report financial assets at fair value through other comprehensive income at what amount?If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P10 par valueshares with a fair value of P20 per share, entered into a mortgage loan of P290,000 and paying directcost and stock issue cost of P50,000 and P20,000 respectively, a P25,000 direct cost and a P50,000indirect cost however remain unpaid. REQUIREMENTS:A. GoodwillB. Consolidated Total Liabilities at the date of acquisitionYou're given the following details of an acquisition of Target Co. by Acquirer Ltd.. What is the transaction value for this acquisition of Target Co.? Acquisition of Target Co. by Acquirer Ltd. Target Share Price ($/sh.) $85.40 Acquisition Premium 15% Diluted Shares Outstanding (MM) 670 Target Total Debt Target Cash and Cash Equivalents % Debt Financing % Equity Financing Equity Financing Fees Debt Financing Fees Other Transaction Costs $3,562 $5,147 40% 60% 4.0% 1.5% $800
- If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P10 par valueshares with a fair value of P20 per share, entered into a mortgage loan of P290,000 and paying directcost and stock issue cost of P50,000 and P20,000 respectively, a P25,000 direct cost and a P50,000indirect cost however remain unpaid.REQUIREMENTS:A. GoodwillB. Consolidated Total Liabilities at the date of acquisitionRequired information A Clarke Corporation subsidiary buys marketable equity securities and inventory on April 1, 2017, for 100,000 won each. It pays for both items on June 1, 2017, and they are still on hand at year-end. Inventory is carried at cost under the lower-of-cost-or-net realizable rule. Currency exchange rates for 1 won follow: $ 0.45 January 1, 2017 April 1, 2017 June 1, 2017 December 31, 2017 =1 won 0.46 =1 0.47 =D1 0.49 =1Question #10: Argossey Corp owns a 70% equity interest in Gramcercy a subsidiary company. During the current year, Argossey sold off a small portion of their stock in Gramercy to an outside company. Before recording this transaction, Argossey adjusted the book value of its investment account. a) What is the purpose of Argossey adjusting its book value? b) How should the parent company record the transaction and what disclosure, if any, is required in the financial sttements and; c) How would Argossey account for the remainder of its investment subsequent to the sale of their partial interest in Gramercy
- Transitory Company acquired the following equity securities: December 31, 2022 Moon Company Star Company Sun Company December 31, 2023 Moon Company Star Company Sun Company Statement of Financial Position Investments - FVOCI Statement of Equity Other Comprehensive Income Retained earnings Statement of Other Comprehensive Income Unrealized gain / (loss) [a] [d] [g] Cost The equity securities do not qualify as held for trading. The entity has elected irrevocably to present changes in fair value in other comprehensive income. Requirement: Complete the table below. Write zero (0) if it is not applicable. Acquisition Date [] 200,000 400,000 600,000 200,000 400,000 600,000 Market 120,000 280,000 650,000 220,000 300,000 580,000 December 31, 2022 [b] [e] [h] [k] December 31, 2023 [c] [U] D [1]Case 2: Non-Controlling Interest measured at fair valueInahan Co. elects the option to measure the non-controlling interest at fair value. However, no independent consultant were engaged. Inahan paid P 1,500,000.00 cash and P 750,000.00 land with fair value of P 1,000,000.00 as consideration for the 75% interest in Bunso, Inc 1.How much is the previously held equity interest in the acquiree?a. 0.00b. 600,000.00c. 652,500.00d. 833,333.33 2.How much is the fair value of the net identifiable assets acquired?a. 4,560,000.00b. 2,610,000.00c. 3,110,000.00d. 2,810,000.00 3.How much is the goodwill (gain on bargain purchase) on the business combination? a. 490,000.00b. 542,500.00c. 723,333.33d. 750,000.00How much is the unrealized gain (loss) recognized in other comprehensive income on December 31, 20x1? Karen Co. purchased the following equity securities on January 1, 20x1 for a total amount of P360,000. Cost Alaska Co. preference shares P200,000 160,000 Valdez Co. ordinary shares Totals P360,000 The shares did not qualify for recognition as held for trading, thus they were classified as investment in equity securities measured at fair value through other comprehensive income. On December 31, 20x1, the portfolio of Karen Co. comprised the following. Fair value - 12/31/x1 Alaska Co. preference shares P240,000 60,000 Valdez Co. ordinary shares Total P300,000 On December 31, 20x2, the portfolio of Karen Co. comprised the following: Fair value-12/31/x2 Alaska Co. preference shares P220,000 Valdez Co. ordinary shares 180,000 Total P400,000 On February 2, 20x3, all of the Alaska Co. preference shares were sold for P160,000 net of transaction costs. 60,000 100,000 O (60,000)