P Limited obtained control with the acquisition of an 80% equity interest in the share capital of S Limited on 1 January 20.9 and paid R100 000 cash and transferred 10 000 ordinary equity shares in W Limited, with a market value of R4 per share, to settle the purchase price of R140 000 for the acquisition of an 80% interest.Identify the correct journal entries to be made in the separate accounting records of P Ltd Select one: a. Dr Investment in S Ltd R140 000 ,Cr Bank R100 000 Cr Investment in W Ltd R40 000 b. Dr Investment in S Ltd R140 000, Dr Investment in W Ltd R40 00, Cr Bank R180 000 c. Dr Investment in S Ltd R110 00 ,Cr Bank R11 000 d. Dr Investment in S Ltd R140 000, Cr Bank R140 000

P Limited obtained control with the acquisition of an 80% equity interest in the share capital of S Limited on 1 January 20.9 and paid R100 000 cash and transferred 10 000 ordinary equity shares in W Limited, with a market value of R4 per share, to settle the purchase price of R140 000 for the acquisition of an 80% interest.Identify the correct journal entries to be made in the separate accounting records of P Ltd Select one: a. Dr Investment in S Ltd R140 000 ,Cr Bank R100 000 Cr Investment in W Ltd R40 000 b. Dr Investment in S Ltd R140 000, Dr Investment in W Ltd R40 00, Cr Bank R180 000 c. Dr Investment in S Ltd R110 00 ,Cr Bank R11 000 d. Dr Investment in S Ltd R140 000, Cr Bank R140 000

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 1BCRQ

See similar textbooks

Similar questions

P Limited obtained control with the acquisition of an 80% equity interest in the share capital of S Limited on 1 January20.9 and paid R100 000 cash and transferred 10 000 ordinary equity shares in W Limited, with a market value of R4 pershare, to settle the purchase price of R140 000 for the acquisition of an 80% interest.How much will be recorded as the Investment in S Ltd in the separate financial statements of S Ltd?Select one:a.R100 000b.R110 000c.R140 000d.R80 000
P Limited obtained control with the acquisition of an 80% equity interest in the share capital of S Limited on 1 January20.9 and paid R140 000 cash to the sellers of the shares (previous shareholder(s)) to settle the purchase price.At acquisition date the equity of S Limited consisted of the following:Share capital (100 000 shares) R100 000Retained earnings R50 000What amount would be recognized as Goodwill in proforma consolidation journals of P Ltd?Select one:a.R20 000b.R30 000c.R50 000d.R10 000
DDaniel Ltd purchased 75 per cent of the issued capital and in the process gained control over Riccardo Ltd on 1 July 2020. The fair value of the net assets of Riccardo Ltd at purchase was represented by: Share Capital $3,760,000 Retained Earnings 1,320,000 Daniel Ltd paid cash consideration of $4 000 000 for Riccardo Ltd. During the period ended 30 June 2021, Riccardo Ltd paid management fees of $540 000 to Daniel Ltd and Riccardo Ltd had an operating profit of $980 000. Riccardo Ltd's opening retained earnings at the beginning of the period were $1 460 000. At the end of the period Riccardo Ltd declared a dividend of $90 000. There were no other inter-company transactions. Goodwill was determined to have been impaired by $19 000 during the period. Companies in the group accrue dividends when they are declared by subsidiaries.For the period ended 30 June 2021, what consolidation journal entries are required and what is the non-controlling interest?
Daniel Ltd purchased 75 per cent of the issued capital and in the process gained control over Riccardo Ltd on 1 July 2020. The fair value of the net assets of Riccardo Ltd at purchase was represented by: Share Capital $3,760,000 Retained Earnings 1,320,000 Daniel Ltd paid cash consideration of $4 000 000 for Riccardo Ltd. During the period ended 30 June 2021, Riccardo Ltd paid management fees of $540 000 to Daniel Ltd and Riccardo Ltd had an operating profit of $980 000. Riccardo Ltd's opening retained earnings at the beginning of the period were $1 460 000. At the end of the period Riccardo Ltd declared a dividend of $90 000. There were no other inter-company transactions. Goodwill was determined to have been impaired by $19 000 during the period. Companies in the group accrue dividends when they are declared by subsidiaries.For the period ended 30 June 2021, what consolidation journal entries are required and what is the non-controlling interest?
P Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, P Company purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine the GOODWILL arising from the consolidation if The fair value of the 25% non controlling interest in Subsidiary Company is P890,000.
P Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, P Company purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine the GOODWILL arising from the consolidation if it is to be computed using the full fair value basis of “Full/Gross-up” Goodwill.
P Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, P Company purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine the GOODWILL arising from the consolidation if The fair value of the 25% non controlling interest in Subsidiary Company is P890,000. answer quickly
Parent Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, Parent purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine:1. Goodwill arising from the consolidation if it is to be computed using the proportionate basis or “Partial Goodwill”2. Goodwill arising from the consolidation if it is to be computed using the full (fair value basis of “Full/Gross-up” Goodwill.3. Goodwill arising from the consolidation if The fair value of the 25% non controlling interest in Subsidiary Company is P890,000.
On January 1, 20x1, AAA Co. acquired 30% ownership interest in BBB, Inc. for ₱200,000. Because the investment gave AAA significant influence over BBB, the investment was accounted for under the equity method in accordance with PAS 28.From 20x1 to the end of 20x3, AAA recognized ₱100,000 net share in the profits of the associate and ₱20,000 share in dividends. Therefore, the carrying amount of the investment in associate account on January 1, 20x3, is ₱280,000.On January 1, 20x4, AAA acquired additional 60% ownership interest BBB, Inc. for ₱1,600,000. As of this date, AAA has identified the following:a. The previously held 30% interest has a fair value of ₱360,000.b. BBB’s net identifiable assets have a fair value of ₱2,000,000.c. AAA elected to measure non-controlling interests at the non-controlling interest’s proportionate share of BBB’s identifiable net assets.Requirement: Compute for the goodwill.
On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…
On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…
On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…