Dale Company, 5,000 ordinary shares (1% interest)c. Present the investments in equity securities on Decembera. Compute the goodwill arising from acquisition on JanuaryOn January 1, 2020, Jam Company reported as long-term2. On November 1, 2020, Dale Company paid a cash dividend1. On May 1, 2020, Dale Company issued a 10% shareProblem 18-4 (AICPA Adapted)as long-termEver Company, 10,000 ordinary shares ( 2% interest)Fox Company, 25,000 ordinary shares (10% interest)1,250,0001,600,0002,000,000dividend.of P20 per share.3. On January 1, 2020, Jam Company paid P5,000,000 for50,000 additional ordinary shares of Fox Company whichrepresented a 20% investment in Fox Company.The fair value of all of Fox's identifiable assets net ofliabilities was equal to their carrying amount ofP20,000,000.Jam Company's initial 10% interest of 25,000 ordinaryshares of Fox Company was acquired on January 1, 2019for P2,000,000.The 10% interest was accounted for under cost method.On January 1, 2020, this 10% existing interest had a fairvalue of P2,400,000.4 Fox Company reported net income of P6,000,000 for 2020,and paid dividend of P20 per share on December 31, 2020.Required:1, 2020.b. Prepare journal entries for 2020.31, 2020. Prepare journal entries on December 31, 2020 and DecemberSplendid Company purchased equity securities during 2020 toThe entity has elected irrevocably to present changes in fairbe held as investments. The cost and market value of theProblem 15-3 (IAA)ProbleAborigstateminvestments are:December 31, 2020CostMarketTrading securitiesSecurities not held for trading2,000,0003,000,0002,500,0002,900,000NoncuFinancMarkeDecember 31, 2021Trading securitiesSecurities not held for trading2,000,0003,000,000Marke2,200,0002,300,000OtheThe securities not held for trading are measured at fair valuethrough other comprehensive income by irrevocable electionUnreaRequired:An &follovPrepare journal entries for 2020 and 2021.XYZАВСRSTProblem 15-4 (IAA)Transitory Company acquired the following equity securities:December 31, 2020CostMarketMoon CompanyStar CompanySun Company200,000400,000600,000120,000280,000650,000OnP2,OnDecember 31, 2021follMoon CompanyStar CompanySun Company200,000400,000600,000220,000300,000580,000XY:RSThe equity securities do not qualify as held for trading.Re1.The entity has elected irrevocably to present changes in tanvalue in other comprehensive income.2.Required:31, 2021.3.

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On January 1, 2020, Jam Company reported as investments the following unquoted equity shares: long-term Dale Company, 5,000 ordinary shares (1% interest) Ever Company, 10,000 ordinary shares ( 2% interest) Fox Company, 25,000 ordinary shares (10% interest) 1,250,000 1,600,000 2,000,000 1. On May 1, 2020, Dale Company issued a 10% share dividend. 2. On November 1, 2020, Dale Company paid a cash dividend of P20 per share. 3. On January 1, 2020, Jam Company paid P5,000,000 for 50,000 additional ordinary shares of Fox Company which represented a 20% investment in Fbx Company. The fair value of all of Fox's identifiable assets net of liabilities was equal to their carrying amount of P20,000,000. Jam Company's initial 10% interest of 25,000 ordinary shares of Fox Company was acquired on January 1, 2019 for P2,000,000. The 10% interest was accounted for under cost method. On January 1, 2020, this 10% existing interest had a fair value of P2,400,000. Fox Company reported net income of P6,000,000 for 2020, and paid dividend of P20 per share on December 31, 2020. Required: a. Compute the goodwill arising from acquisition on January 1, 2020. b. Prepare journal entries for 2020. c. Present the investments in equity securities on December 31, 2020.

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 19E