Subject: AFAR#185 Push-down AccountingUse the following information for questions 184 and 185:On 4/1/x6, Pullco acquired 100% of Strapco's outstanding common stock for P500,000 cash. For20x6. Strapco reported the following items:First quarterRemainder of yearNet IncomeP 40,000150,000P190.000Dividends DeclaredP 30,00090,000P120.000184. In addition, amortization of cost in excess of book value for 20x6 was P20,000. Assume non-push-down accounting is used. Under the equity method, what is the carrying value of theInvestment account at 12/31/x6?P500,000a.d. P570,000e. P630,000b. P540,000P550,000= 540k%3DC.185. In addition, amortization of cost in excess of book value for 20x6 was P20,000. AssSume non-push-down acCounting is used. Under the cost method, what is the carying value of theInvestment account at 12/31/x6?.P500,000P570,000P630,000d.a.b. P540,000P550,000e.C.

185. Investment = $500,000 Net income remainder = $150,000 Dividend declared remainder = $90,000

Answered: Push-down AcCounting Use the following…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

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Ames Corporation repurchases 10,000 shares of its common stock for $12 per share. The shares were originally issued at an average price of $10 per share. Later it resells 6,000 of the shares for $15 per share and the remaining 4,000 shares for $17 per share. How much gain or loss should Ames report on its income statement as a result of these transactions? $38.000 gain $0 $20,000 loss $20,000 loss and $38,000 gain
Income Statement, Lower Portion Cunningham Company reports a retained earnings balance of 365,200 at the beginning of 2019. For the year ended December 31, 2019, the company reports pretax income from continuing operations of 150,500. The following information is also available pertaining to 2019: 1. The company declared and paid a 0.72 cash dividend per share on the 30,000 shares of common stock that were outstanding the entire year. 2. The company incurred a pretax 21,000 loss as a result of an earthquake, which is not unusual for the area. This is included in the 150,500 income from continuing operations. 3. The company sold Division P (a component of the company) in May. From January through May, Division P had incurred a pretax loss from operations of 33,000. A pretax gain of 15,000 was recognized on the sale of Division P. Required: Assuming that all the pretax items are subject to a 30% income tax rate: 1. Complete the lower portion of Cunningham's 2019 income statement beginning with Pretax Income from Continuing Operations. Include any related note to the financial statements. 2. Prepare an accompanying retained earnings statement.

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Push-down AcCounting Use the following informat On 4/1/x6, Pullco acquire- 20x6. Strapco reported the