Use the following information for the next two (2) questions: Cavalier Company was incorporation on January 1, 2021. The following were the transactions during the year: Total consideration from share issuance amounted to P4,000,000. A land and building were acquired through a lump sum payment of P800,000. A mortgage amounting to P200,000 was assumed on the land and building. Total payments of P160,000 were made during the year on the mortgage assumed n the land and building. The payments are inclusive of interest amounting to P20,000. Additional capital of P400,000 was obtained through bank loans. None of the bank loans were paid during the year. Half of the bank loan required a secondary mortgage on the land and building. There is no accrued interest as of year-end. Dividends declared during the year but remained unpaid amounted to P120,000. No other transactions during the year affected liabilities. Retained earnings as of December 31, 2021 is P240,000. How much is the profit for the year? А. 420,000 В. 360,000 C. 320,000 D. 280,000 How much is the total assets as of December 31, 2021? A. 4,940,000 В. 4,820,000 C. 4,802,000 D. 4,780,000

Use the following information for the next two (2) questions: Cavalier Company was incorporation on January 1, 2021. The following were the transactions during the year: Total consideration from share issuance amounted to P4,000,000. A land and building were acquired through a lump sum payment of P800,000. A mortgage amounting to P200,000 was assumed on the land and building. Total payments of P160,000 were made during the year on the mortgage assumed n the land and building. The payments are inclusive of interest amounting to P20,000. Additional capital of P400,000 was obtained through bank loans. None of the bank loans were paid during the year. Half of the bank loan required a secondary mortgage on the land and building. There is no accrued interest as of year-end. Dividends declared during the year but remained unpaid amounted to P120,000. No other transactions during the year affected liabilities. Retained earnings as of December 31, 2021 is P240,000. How much is the profit for the year? А. 420,000 В. 360,000 C. 320,000 D. 280,000 How much is the total assets as of December 31, 2021? A. 4,940,000 В. 4,820,000 C. 4,802,000 D. 4,780,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 8MC

See similar textbooks

Similar questions

Prepare general journal entries for the following transactions, identifying each transaction by letter: (a) Gnu Company issued 5,000 shares of 1 par common stock to the Prendergas law firm as partial payment of fees incurred to incorporate the business. Gnu was short of cash, so Prendergas agreed to accept 10,000 cash and the shares of common stock in full settlement of its bill for 55,000. (b) Gnu issued 50,000 shares of 1 par common stock in exchange for a parcel of land for building a shopping plaza. (The list price for the land was 400,000; a similar parcel in the same area sold last week for 380,000. During the past month, the price at which Gnus common stock has traded on the open market has ranged from 5 to 12 per share. Two trades occurred yesterday at 7 and 10 per share.) (c) Gnu purchased 10,000 shares of 1 par value common treasury stock for 70,000. (This is the only treasury stock that Gnu holds.) (d) Gnu sold 4,000 shares of common treasury stock for 32,000. (e) Gnu sold 5,000 shares of common treasury stock for 30,000.
During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 loss
Vishnu Company is authorized to issue 500,000 shares of $2 par value common stock. In conjunction with its incorporation process and the IPO, the company has the following transaction: Apr. 10, issued 1,000 shares of stock for legal services valued at $15,000. Journalize the transaction.
Hong Banjang was incorporated on January 1, 2020. The following were the transactions during the year:• Total consideration from share issuances amounted to ₱400000.• A land and building were acquired through a lump sum payment of ₱80000. A mortgage amounting to ₱20000 was assumed on the land and building. • Total payments of ₱16000 were made during the year on the mortgage assumed on the land and building. The payments are inclusive of interest amounting to ₱2000. • Additional capital of ₱40000 was obtained through bank loans. None of the bank loans were paid during the year. Half of the bank loans required a secondary mortgage on the land and building. • There is no accrued interest as of year-end. • Dividends declared during the year but remained unpaid amounted to ₱12000. • No other transactions during the year affected liabilities.• Retained earnings as of December 31, 2020 is ₱24000.How much is the total assets as of December 31, 2020?
BTS Co. was incorporated on January 1, 2021. The following were the transactions during the year:• Total consideration from share issuances amounted to ₱4,000,000.• A land and building were acquired through a lump sum payment of ₱800,000. A mortgage amounting to ₱200,000 was assumed on the land and building. • Total payments of ₱160,000 were made during the year on the mortgage assumed on the land and building. The payments are inclusive of interest amounting to ₱20,000. • Additional capital of ₱400,000 was obtained through bank loans. None of the bank loans were paid during the year. Half of the bank loans required a secondary mortgage on the land and building. • There is no accrued interest as of year-end. • Dividends declared during the year but remained unpaid amounted to ₱120,000. • No other transactions during the year affected liabilities.• Retained earnings as of December 31, 2021 is ₱240,000.How much is the total assets as of December 31, 2021?How much is the profit for the…
BT21 Co. was incorporated on January 1, 2021. The following were the transactions during the year:• Total consideration from share issuances amounted to ₱4,000,000.• A land and building were acquired through a lump sum payment of ₱800,000. A mortgage amounting to ₱200,000 was assumed on the land and building. • Total payments of ₱160,000 were made during the year on the mortgage assumed on the land and building. The payments are inclusive of interest amounting to ₱20,000. • Additional capital of ₱400,000 was obtained through bank loans. None of the bank loans were paid during the year. Half of the bank loans required a secondary mortgage on the land and building. • There is no accrued interest as of year-end. • Dividends declared during the year but remained unpaid amounted to ₱120,000. • No other transactions during the year affected liabilities.• Retained earnings as of December 31, 2021 is ₱240,000.How much is the profit for the year?
Rain and Bow Company was incorporated on January 1, 2019 with proceeds from the issuance of P7,500,000 in share capital and borrowed funds of P1,100,000During the first year, revenue from sales and consulting amounted to P8,200,000, and operating costs and expenses totaled P6,400,000.On December 15, 2019, the entity declared a P300,000 dividend, payable to shareholders on January 15, 2020. The liabilities increased to P2,000,000 by December 31, 2019.On December 31, 2019, what should be reported as total assets? a. 11,000,000b. 11,300,000 c. 10,100,000 d. 12,100,000
An entity was incorporated on January 1, 2020 with proceeds from the issuance of P5,000,000 in shares and borrowed funds of P1,000,000. During the first year of operations, revenue from sales amounted to P8,000,000 and operating costs and expenses totaled P6,000,000. On December 15, the entity declared a P500,000 cash dividend, payable to shareholders on January 15, 2021. No additional activities affected owners’ equity in 2020. The liabilities increased to P1,800,000 by December 31, 2020. What amount should be reported as total assets on December 31, 2020?
The Crump Companies, Inc. has ownership interests in several public companies. At the beginning of 2021, the company’s ownership interest in the common stock of Silken Properties increased to the point that it became appropriate to begin using the equity method of accounting for the investment. The balance in the investment in equity securities account was $31 million at the time of the change. Accountants working with company records determined that the balance in an investment in equity affiliate account would have been $48 million if the equity method had been used previously.Required:1. Will Crump apply the new method retrospectively or apply the new method prospectively?2. Suppose Crump is changing from the equity method rather than to the equity method. Will Crump apply the new method retrospectively or prospectively?