White Bright Limited has three subsidiary Companies as on 31st March, 2018. Based upon the information given in the following, ascertain how the Cost of Investment will be treated in the Consolidated Balance Sheet.
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White Bright Limited has three subsidiary Companies as on 31st March, 2018. Based upon the information given in the following, ascertain how the Cost of Investment will be treated in the Consolidated Balance Sheet.
|
Particulars |
Amount in Millions |
||
|
Hazy Limited |
Clear Limited |
Sun Limited |
|
|
Investment made |
205.00 |
117.00 |
145.00 |
|
Percent of Shares Owned |
60% |
65% |
75% |
|
Assets at the time of Investment |
625.40 |
314.84 |
443.75 |
|
Liabilities at the time of Investment |
260.44 |
134.84 |
329.55 |
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by Bartleby Expert- The investments of Steelers Inc. include a single investment: 33,100 shares of Bengals Inc. common stock purchased on September 12, 2016, for 13 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, 2016, balance sheet date, the share price declined to 11 per share. a. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December 31, 2016. b. How is the unrealized gain or loss for available-for-sale investments disclosed on the financial statements?Up and its 80 percent–owned subsidiary (Down) reported the following figures for the year ending December 31, 2018. Down paid dividends of $30,000 during this period.In 2017, intra-entity gross profits of $30,000 on upstream transfers of $90,000 were deferred into 2018. In 2018, intra-entity gross profits of $40,000 on upstream transfers of $110,000 were deferred into 2019.a. What amounts appear for each line in a consolidated income statement? Explain your computations.b. What income tax expense should appear on the consolidated income statement if each company files a separate return? Assume that the tax rate is 30 percent.The following six accounts appear in the 2018 financial statements of Poplar and its 100%-owned subsidiary, Spruce (created in 2011), at the end of 2018. Poplar Spruce Common stock, 12/31/18 $ 80,000 $ 50,000 Additional paid-in capital, 12/31/18 240,000 160,000 Retained earnings, 12/31/18 490,000 170,000 Dividends declared, 2018 120,000 40,000 Equity in net income of Spruce, 2018 50,000 Investment in subsidiary, 12/31/18 380,000 In addition, Poplar’s Retained Earnings account showed $325,000 on 1/1/18. Required: Did Poplar use the cost method or the equity method to record its investment in Spruce? How do you know? Give two reasons. Provide the following figures: (Show calculations!) a) Spruce’s retained earnings at 1/1/18:…
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- Attached are the consolidated workpaper balances of Bush, Inc., and its subsidiary, Dorr Corporation, as of December 31, 2016 and 2015:Additional information:a. On January 20, 2016, Bush, Inc., issues 10,000 shares of its common stock for land having a fair value of $215,000.b. On February 5, 2016, Bush reissues all of its treasury stock for $44,000.c. OnMay 15, 2016, Bush pays a cash dividend of $58,000 on its common stock.d. On August 8, 2016, equipment is purchased for $127,000.e. On September 30, 2016, equipment is sold for $40,000. The equipment costs $62,000 and has a net book value of $34,000 on the date of the sale.f. On December 15, 2016, Dorr Corporation pays a cash dividend of $50,000 on its common stock.g. Deferred income taxes represent timing differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial reporting.h. Net income for 2016 is as follows:Controlling interest in consolidated net income. .…On January 1, Parent Company acquired 90% of Subsidiary Company in exchange for 5,400 shares of P10 par common stock having a market value of P120,600. Parent and Subsidiary condensed balance sheet on January 1, were as follows: REQUIREMENTS: USING THE ADDITIONAL INFORMATION WHAT IS THE AMOUNT OF THE: a. The investment balance on December 31 b. Dividend Income for the year c. Non-controlling interest in net income on December 31Gera Corporation owns two financial investments in the shares of listed companies. Details of which are as follows: Investment 1 – Acquired on September 1, 2020, at a cost of P50,000 with a Fair value of P60,000 at year-end for the purpose of trading. Investment 2 - Acquired on August 1, 2020, at a cost of P25,000 to hold indefinitely. Its fair value at year-endis P20,000. What are the amounts to appear in the statement of Profit and Loss for the year ended September 30, 2020?
- On June 1, 2020, SME A acquired 35% of the equity of entities X, Y, Z for P64,000 and P58,000 and P37,000, respectively, SME A has joint control over the strategic financial and operating decisions of entities X, Y and Z. Transaction costs of 5% of the purchase price of the shares were incurred by SME A. On December 31, 2020, Entity X declared dividends of P9,000 and Entity Y, P15,000 for the year 2020. These dividends are to be paid by X and Y in 2021. Entity Z declared and paid a dividend of P24,000 for the year ended 2020. For the year ended December, 31, 2020, entities X and Y recognized loss of P30,000 and P42,000. respectively. However, entity Z recognized a profit of P18,000 for that year. Published price quotations do not exist for the shares of X, Y and Z. Using appropriate valuation techniques, SME A determined the fair values of their investments in entities X, Y and Z at December 31, 2020 as P60,000, P65,000, and P49,000, respectively. Costs to sell are estimated at 9% of…On 1 January 2018, Chelsea Ltd acquired 75% of the shares in Orlando Ltd at N$126 000. At that date, the balance on Orlando Ltd’s retained earnings account amounted to N$36 000. The share capital amounted to N$120 000 and no shares have been issued since that date.The following are the condensed financial statements of Chelsea Ltd and subsidiary OrlandoLtd at 31 December 2020.STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2020Chelsea LtdN$Orlando LtdN$ASSETSProperty, plant and equipment 168 000 105 000Investment in Orlando Ltd at fair value 180 000 -Trade receivables 87 000 156 000Total assets 435 000 261 000EQUITY AND LIABILITIESShare capital 240 000 120 000Mark-to-market reserve 54 000 -Retained earnings 54 000 54 000Long-term borrowings 30 000 6 000Trade and other payables 57 000 81 000Total equity and liabilities 435 000 261 000EXTRACT FROM THE STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020Chelsea LTDN$Orlando LTDN$Profit 55 500…Up and its 80 percent–owned subsidiary (Down) reported the following figures for the year ending December 31, 2018. Down paid dividends of $30,000 during this period. UP DOWN Sales $(600000) $(300000) Cost of goods sold 300000 140000 Operating expenses 174000 60000 Dividend Income (24000) -0- Net income $(150000) $(100000) In 2017, intra-entity gross profits of $30,000 on upstream transfers of $90,000 were deferred into 2018. In 2018, intra-entity gross profits of $40,000 on upstream transfers of $110,000 were deferred into 2019.a. What amounts appear for each line in a consolidated income statement? Explain your computations.b. What income tax expense should appear on the consolidated income statement if each company files a separate return? Assume that the tax rate is 30 percent.
