On June 30, 2019, Cassiopeia purchased the following shares at a total cost of P3,600,000: Aquila Grus Indus Number of shares 50,000 100,000 200,000 Total fair value 450,000 1,350,000 1,800,000 At the end of the year, the fair values of the shares are as follows: Aquila Grus Indus P12 16 6 On June 30, 2020, Cassiopeia sold half of its holdings in Indus at P7.50 per share. Prepare the journal entries in the books of Cassiopeia given the following independent assumptions: 1. SEPARATE JOURNAL ENTRIES for shares classified as Financial Asset at Fair Value through Profit or Loss (P/L) & Fair Value through Other Comprehensive Income (OCI
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- On January 1, 2021, the fair values of CHAESOO Inc. net assets were as follows:Current assets P100,000Equipment 150,000Land 50,000Buildings 300,000Liabilities 80,000On January 1, 2021, BLACKPINK Corp. purchased the net assets of CHAESOO by issuing 100,000shares of its P1 par value stock when the fair value of the stock was P6.20. It was further agreed thatBLACKPINK would pay an additional amount on January 1, 2023, if the average income during the2- year period of 2021 – 2022 exceeded P80,000 per year. The expected value of this consideration wascalculated as P184,000; the measurement period is one year. Requirement:Compute for the Goodwill or (Gain on Bargain Purchase) on January 1, 2021.During 2020, Maria Company purchased trading securities with the following cost and market value on December 31, 2020: Security Cost Market Value A - 1,000 shares 200,000 300,000 B - 10,000 shares 1,700,000 1,600,000 C - 20,000 shares 3,100,000 2,900,000 5,000,000 4,800,000 The entity sold 10,000 shares of Security B on January 27, 2021, for P150 per share. What amount should be reported as gain or loss on sale of trading investment in 2021?On July 1, 2019, GAR Company acquired 800,000 shares of FAR Company at a price of P13 per share. GAR estimated that the price paid include P1.50 premium in order to gain control over FAR Company. On this date, the fair values of FAR Company’s identifiable assets and liabilities and their carrying values are given below: Book Value Fair ValueCurrent assets P2,000,000 P2,000,000Property, plant and equipment 9,000,000 11,000,000Liabilities P3,000,000 Ordinary shares, P5 par 5,000,000 Retained earnings 3,000,000 Determine the amount of goodwill assuming the non-controlling interest is measured at the proportionate share in the net assets:
- Marcus Company made the following transactions in the ordinary shares of Cato Company designated as a financial asset at fair value through profit or loss: July 16, 2018- Purchased 10,000 shares at P45 per share. nces June 28, 2019 - Sold 2,000 shares for P51 per share. ations May 18, 2020 - Sold 2,500 shares for P33 per share. The end-of-year market prices for the shares were as follows: December 31, 2018 - P47 per share December 31, 2019 P39 per share December 31, 2020 P31 per share 1. How much should be recognized in 2020 profit or loss as a result of the fair value changes? (use negative sign if your answer is a loss) 2. How much should be recognized as realized gain on sale for the year ended December 31, 2020? (use negative sign if your answer is a loss) 1 2)Marcus Company made the following transactions in the ordinary shares of Cato Company designated as a financial asset at fair value through profit or loss: July 16, 2018 - Purchased 10,000 shares at P45 per share. | June 28, 2019- Sold 2,000 shares for P51 per share. May 18, 2020 - Sold 2,500 shares for P33 per share. The end-of-year market prices for the shares were as follows: December 31, 2018 - P47 per share December 31, 2019 - P39 per share December 31, 2020 - P31 per share 1. How much should be recognized in 2020 profit or loss as a result of the fair value changes? (use negative sign if your answer is a loss) 2. How much should be recognized as realized gain on sale for the year ended December 31, 2020? (use negative sign if your answer is a loss) 1. 2.On June 30, 2021, Peter, Inc. purchased the following shares at a total cost of P10,700,000 designated as FVPL investment: Number of shares Total fair value Faye Corp. 100,000 1,400,000 Barto Corp. 200,000 3,700,000 Kesha Corp. 400,000 5,600,000 At the end of the year, the fair values of the shares are as follows: Faye Corp. P17 Barto Corp. 21 Kesha Co. 11 On June 30, 2022, Peter sold 75% of its holdings in Kesha at P13 per share. How much is the realized gain on sale on FVPL to be reported in net income during 2022?
- Orange LTD has the following investments at December 31, 2020; Fair value Historical cost Sept 30, 2019 $15,000 Fair value Sept 30, 2020 $25,000 Fair value Dec 31, 2020 $30,000 Shares of DEF Bonds of Brooke purchased at par value) Shares of CooksTown Shares of Tulip $25,000 10,000 12,000 18,000 12,000 18,000 16,500 11,000 16,000 19,500 12,500 16,000 20,500 Orange, whose year-end is Sept. 30, purchased the share of Tulip on January 1, 2019, If Orange irrevocably elected to classify its investment in Tulip at fair value through OCL what amount will be reported in other comprehensive income at September 30, 2020? $1,500 gain O $2,500 gain. et O $19,500 O $3,000 gain.On April 5. 2020, Paul Company purchased P50 par, 10,000 ordinary shares of George Company at P80 per share. The shares are designated as equity investments at Fair value through other comprehensive income. On October 26, 2020, Paul received 10,000 rights to purchase an additional 2,000 shares at P90 per share. The share rights received had an expiration date of February 1, 2021. Assuming that all of the share rights are exercised, at which time the market value per ordinary share was P98, what Is the total cost of the new Investment arising from the exercise of these rights? a. P196,000 b. P180,000 c. P160,000 d. P100,000Lexington Co. has the following securities outstanding on December 31, 2020 (its first year of operations). Cost Fair Value Greenspan Corp. stock $20,000 $19,000 Summerset Company stock 9,500 8,800 Tinkers Company stock 20,000 20,600 $49,500 $48,400 During 2021, Summerset Company stock was sold for $9,200, the difference between the $9,200 and the “fair value” of $8,800 being recorded as a “Gain on Sale of Investments.” The market price of the stock on December 31, 2021, was Greenspan Corp. stock $19,900; Tinkers Company stock $20,500. Instructions a. What justification is there for valuing equity securities at fair value and reporting the unrealized gain or loss as part of net income? b. How should Lexington Co. report this information in its financial statements at December 31, 2020? Explain. c. Did Lexington Co. properly account for the sale of the Summerset Company stock? Explain. d. Are there any additional entries necessary for…
- On January 1, 2020, AB Company purchased the net assets of the CD Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. It was furtheragreed that Honey Mahogany would pay an additional amount on January 1, 2022, if the average income during the 2-year period of 2020-2021 exceeded P80,000 per year. The expected value of this consideration was calculated as P184,000; the measurement period is one year. What amount will be recorded as goodwill on January 1, 2020?A. ZeroB. 100,000C. 180,000D. 284,000SB Corp. is offered 200,000 shares of EX Corp. ordinary shares in exchange for its net assets at August 30, 2020. The acquirer shares had a market value of P11 per share on that date. The balance sheet of the two companies at the date of acquisition follow: SB CORP EX CORP Total assets 1,097,500 1,733,250 Liabilities 1,097,500 383,250 Ordinary shares, par P1 800,000 25,000 Retained earnings (deficit) (15,000) 1,325,000 Total liabilities and stockholders’ equity 1,097,500 1,733,250 The goodwill (income from acquisition) resulting from the business combination would beOn January 1, 2021, Cream Company offered the c share appreciation rights. The terms are predetermined price P100, 10,000 shares, vesting period 3 years and expiration date, December 31, 2023. The share appreciation is to be paid on the date of exercise. The following are the share prices: January 1, 2021 100 December 31, 2021 105 December 31, 2022 95 December 31, 2023 105 How much is the liability for December 31, 2022?