Chapter 15, Problem 20QA

Mikkeli OY acquired a brand name with an indefinite life in 2021 for 43,600 markkas. At December 31, 2020, the brand name could be sold for 35,200 markkas, with zero costs to sell. Expected cash flows from the continued use of the brand are 45,870 markkas, and the present value of this amount is 34,200 markkas.   Assume that Mikkeli OY is a foreign company using IFRS and is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes.   Required: Prepare journal entries for this brand name for the year ending December 31, 2020, under (1) IFRS and (2) U.S. GAAP. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020 conversion worksheet to convert IFRS balances to U.S. GAAP.

2.for his first purchased how much excess payment would be? On January 1 , 2018 , Apple Company pays 70,000 for 10 % interest in Hawaii Company On that date , Hawaii has a book value of 600,000 although equipment , which has a five - year life is undervalued by 100,000on its books . On January 1 , 2019. Apple acquire an additional 30 % of the Hawaii company for 264,000 this second purchase provides Apple the ability to exert significant influence over Hawaii , and Apple will now apply the equity method . At the time of the transaction Hawaii equipment with four - year life was undervalued by only $ 80,000 . During these two years Hawaii reported the following operational results Year 2018 net income210,000 and Dividends 110.000 Year 2019 net income 250,000 and dividend 100.000 Cash dividends are always paid on July 1 of each year and goodwill is considered to have an indefinite life In 2020 Hawaii Company reports 400.000 in income from continuing operational plus 60.000 extraordinary…