5. On January 1, 202X, Dianne Corporation acquired the net assets of Cyril Corporation by issuing 60,000shares with par and market values of P20 and P2,300,000, respectively. Moreover, it agreed to pay anadditional Pi70,000 on January 1, 202Z if the average income in 202X and 202Y exceeds P150,000 peryear. The expected value of the additional payment is estimated at P102,000 based on the 60% probabilityof achieving the target average income. The carrying and fair values of Cyril Corporation's identifiable netassets as of the acquisition date are P2,200,000 and P2,000,000, respectively.Required:a. Determine the amount of goodwill or gain on bargain purchase from the above transaction.b. Give the adjusting entry assuming that the company determined on September 30, 202X that there isan 80% probability that the estimated average income will be achieved.c. Give the adjusting entry assuming that the company determined on March 31, 202Y that there is a 90%probability that the estimated average income will be achieved.

Dianne Corporation pays Cyril Corporation in shares and cash as purchase consideration for Cyril…

On January 1, 202X, Dianne Corporation acquired the net assets of Cyril Corporation by issuing e shares with par and market values of P20 and P2,300,000, respectively. Moreover, it agreed to p additional Pi70,000 on January 1, 202Z if the average income in 202x and 202Y exceeds P150,0 year. The expected value of the additional payment is estimated at P102,000 based on the 60% prob of achieving the target average income. The carrying and fair values of Cyril Corporation's identifiab assets as of the acquisition date are P2,200,000 and P2,000,000, respectively. Required: a. Determine the amount of goodwill or gain on bargain purchase from the above transaction. b. Give the adiusting entry assuming that the company determined on September 30, 202X that th

On January 1, 202X, Dianne Corporation acquired the net assets of Cyril Corporation by issuing e shares with par and market values of P20 and P2,300,000, respectively. Moreover, it agreed to p additional Pi70,000 on January 1, 202Z if the average income in 202x and 202Y exceeds P150,0 year. The expected value of the additional payment is estimated at P102,000 based on the 60% prob of achieving the target average income. The carrying and fair values of Cyril Corporation's identifiab assets as of the acquisition date are P2,200,000 and P2,000,000, respectively. Required: a. Determine the amount of goodwill or gain on bargain purchase from the above transaction. b. Give the adiusting entry assuming that the company determined on September 30, 202X that th

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 62P

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(Appendix 14.1)Pamlico Company has a 500,000, 15%, 3-year note dated January 1, 2019, payable to Forest National Bank. On December 31, 2020, the bank agreed to settle the note and unpaid interest of 75,000 for 50,000 cash and marketable securities having a current market value of 375,000. Pamlicos acquisition cost of the securities is 385,000. Ignoring income taxes, what amount should Pamlico report as a gain from the debt restructuring on its 2020 income statement? a. 65,000 b. 75,000 c. 140,000 d. 150,000
LO.4, 7 In December 2019, Carl Corporation sold land it held as an investment. The corporation received 50,000 in 2019 and a note payable (with adequate interest) for 150,000 to be paid in 2021. Carl Corporations cost of the land was 80,000. The corporation has a 90,000 net capital loss carryover that will expire in 2019. Should Carl Corporation report the sale in 2019 or use the installment method to report the income as payments are received?
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On January 1, 202X, Dianne Corporation acquired the net assets of Cyril Corporation by issuing 60,000 shares with par and market values of P20 and P2,300,000, respectively. Moreover, it agreed to pay an additional P170,000 on January 1, 202Z if the average income in 202X and 202Y exceeds P150,000 per year. The expected value of the additional payment is estimated at P102,000 based on the 60% probability of achieving the target average income. The carrying and fair values of Cyril Corporation’s identifiable net assets as of the acquisition date are P2,200,000 and P2,000,000, respectively. Required: Determine the amount of goodwill or gain on bargain purchase from the above transaction. Give the adjusting entry assuming that the company determined on September 30, 202X that there is an 80% probability that the estimated average income will be achieved. Give the adjusting entry assuming that the company determined on March 31, 202Y that there is a 90% probability that the estimated…
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