Loose Leaf For International Accounting
5th Edition
ISBN: 9781260466539
Author: Timothy Doupnik, Mark Finn, Giorgio Gotti, Hector Perera Professor
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 33EP
Part 1
To determine
Compute the amount of non-controlling asset and
Part 2
To determine
Calculate the amount of identifiable net assets and goodwill.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
At the beginning of the current year, Boyet Company bought 40% of Aubrey Company’s outstanding
ordinary shares for P3,500,000. The company also paid P700,000 to a business broker who helped find a
suitable business and negotiated the purchase.
The carrying amount of Aubrey Company’s net assets at the purchase date totaled P9,000,000.
The difference was attributed to plant which had a carrying amount of P1,100,000 and a fair value of
P2,000,000 and to inventory which had a carrying amount of P250,000 and a fair value of P350,000. The
plant has 18-year life. All inventory was sold during the current year.
During the current year, the investee reported net income of P1,200,000 and paid a P200,000 cash
dividend.
Of the amount paid for the investment, how much is attributable to goodwill?
How much is the amortization of purchase differential during the current year?
What amount should be reported as investment income for the current year?
What is the carrying amount of the investment in…
As a long-term investment, Painters’ Equipment Company purchased 20% of AMC Supplies Inc.’s 400,000 shares for $480,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC’s net assets were equal. During the year, AMC earned net income of $250,000 and distributed cash dividends of 25 cents per share. At year-end, the fair value of the shares is $505,000. Required: 1. Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year. 2. Assume significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.
On January 1, 2024, Cameron Incorporated bought 30% of the outstanding common stock of Lake Construction Company for $330 million cash, giving Cameron the ability to exercise significant influence over Lake’s operations. At the date of acquisition of the stock, Lake's net assets had a fair value of $700 million. Its book value was $600 million. The difference was attributable to the fair value of Lake's buildings and its land exceeding book value, each accounting for one-half of the difference. Lake’s net income for the year ended December 31, 2024, was $110 million. During 2024, Lake declared and paid cash dividends of $20 million. The buildings have a remaining life of 5 years.
Record the adjustment for depreciation.
Chapter 4 Solutions
Loose Leaf For International Accounting
Ch. 4 - Prob. 1QCh. 4 - How do IFRS and U.S. GAAP differ in their approach...Ch. 4 - Prob. 3QCh. 4 - Prob. 4QCh. 4 - Prob. 5QCh. 4 - Prob. 6QCh. 4 - Prob. 7QCh. 4 - Prob. 8QCh. 4 - Prob. 9QCh. 4 - Where in the food products value chain are...
Ch. 4 - Prob. 11QCh. 4 - Prob. 12QCh. 4 - Prob. 13QCh. 4 - Prob. 14QCh. 4 - Prob. 15QCh. 4 - Prob. 16QCh. 4 - Prob. 17QCh. 4 - Prob. 18QCh. 4 - Prob. 19QCh. 4 - Prob. 20QCh. 4 - Prob. 21QCh. 4 - How does the two-step model traditionally used for...Ch. 4 - How are borrowing costs accounted for under IFRS?Ch. 4 - Prob. 24QCh. 4 - 1. A company incurred the following costs related...Ch. 4 - 2. A company determined the following values for...Ch. 4 - Prob. 3EPCh. 4 - 4. On January 1, Year 1, an entity acquires a new...Ch. 4 - Prob. 5EPCh. 4 - 6. Under IFRS, an entity that acquires an...Ch. 4 - Prob. 7EPCh. 4 - Prob. 8EPCh. 4 - Prob. 9EPCh. 4 - Prob. 10EPCh. 4 - Prob. 11EPCh. 4 - Changsha Corporation purchased an asset during the...Ch. 4 - Prob. 13EPCh. 4 - Prob. 14EPCh. 4 - In the fourth quarter of Year 1, Beech Corporation...Ch. 4 - 16. This is a continuation of problem 15. At...Ch. 4 - 17. Steffen-Zweig Company exchanges two used...Ch. 4 - 18. Stevenson Corporation acquires a one-year-old...Ch. 4 - 19. Quick Company acquired a piece of equipment in...Ch. 4 - Prob. 20EPCh. 4 - 21. Jefferson Company acquired equipment on...Ch. 4 - 22. Madison Company acquired a depreciable asset...Ch. 4 - 29. Stratosphere Company acquires its only...Ch. 4 - QualCore Company began operations on January 1,...Ch. 4 - 26. Buch Corporation purchased Machine Z at the...Ch. 4 - Prob. 26EPCh. 4 - Prob. 27EPCh. 4 - Prob. 28EPCh. 4 - Prob. 29EPCh. 4 - Prob. 31EPCh. 4 - Prob. 33EPCh. 4 - Prob. 34EPCh. 4 - Prob. 35EPCh. 4 - Prob. 36EPCh. 4 - Prob. 37EP
Knowledge Booster
Similar questions
- During 20X1, Craig Company had the following transactions: a. Purchased 300,000 of 10-year bonds issued by Makenzie Inc. b. Acquired land valued at 105,000 in exchange for machinery. c. Sold equipment with original cost of 810,000 for 495,000; accumulated depreciation taken on the equipment to the point of sale was 270,000. d. Purchased new machinery for 180,000. e. Purchased common stock in Lemmons Company for 82,500. Required: 1. Prepare the net cash from investing activities section of the statement of cash flows. 2. CONCEPTUAL CONNECTION Usually, the net cash from investing activities is negative. How can Craig cover this negative cash flow? What other information would you like to have to make this decision?arrow_forwardOn January 1, 2024, Cameron Incorporated bought 30% of the outstanding common stock of Lake Construction Company for $330 million cash, giving Cameron the ability to exercise significant influence over Lake’s operations. At the date of acquisition of the stock, Lake's net assets had a fair value of $700 million. Its book value was $600 million. The difference was attributable to the fair value of Lake's buildings and its land exceeding book value, each accounting for one-half of the difference. Lake’s net income for the year ended December 31, 2024, was $110 million. During 2024, Lake declared and paid cash dividends of $20 million. The buildings have a remaining life of 5 years. Required: Complete the table below and prepare all appropriate journal entries related to the investment during 2024, assuming Cameron accounts for this investment by the equity method. Determine the amounts to be reported by Cameron. 1 Record the investment in Lake Construction shares. 2 Record the…arrow_forwardOn January 1, 20x1, DIAPHANOUS Co. acquired all of the identifiable assets and assumed all of the liabilities of TRANSPARENT, Inc. by paying cash of ₱4,000,000. On this date, the identifiable assets acquired and liabilities assumed have fair values of ₱6,400,000 and ₱3,600,000, respectively.arrow_forward
- As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Incorporated's 470,000 shares for $550,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC’s net assets were equal. During the year, AMC earned net income of $320,000 and distributed cash dividends of 20 cents per share. At year-end, the fair value of the shares is $582,000. 1. Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year. Record the purchase of AMC Supplies shares for $550,000 as a long-term investment. Record Painters' Equipment's share of AMC Supplies' $320,000 net income. Record the cash dividend of 20 cents per share. Record any necessary year-end adjusting journal entry when the fair value of the shares held are $582,000.arrow_forwardAt the beginning of current year, Cynosure Company purchased 30% of the ordinary shares of another entity for P3,500,000 when the net assets acquired amounted to P7,000,000 At acquisition date, the carrying amounts of the identifiable assets and liabilities of the investee were equal to their fair value, except for equipment for which the fair value was P1,500,000 greater than carrying amount and inventory whose fair value was P500,000 greater than cost. The equipment has a remaining life of 4 years and the inventory was all sold during the current year. The investee reported net income of P4,000,000 and paid P1,000,000 dividends during the current year. Required: 1. Prepare journal entries for the current year. 2. Compute the investment income for the current year.arrow_forwardAt the beginning of the current year, FFF Company acquired 20% of the outstanding ordinary shares of Vee Company for P8,000,000. This investment gave FFF the ability to exercise significant influence over Vee. The carrying amount of the acquired shares was P6,000,000. The excess of cost over carrying amount was attributed to a depreciable asset which was undervalued on Vee's statement of financial position and which had a remaining useful life of 10 years. The investee reported net income of P1,800,000 and paid cash dividends of P400,000 and thereafter issued 5% share dividend during the current year. What is the carrying amount of the investment in associate at year-end?arrow_forward
- At the beginning of the current year, FFF Company acquired 20% of the outstanding ordinary shares of Vee Company for P8,000,000. This investment gave FFF the ability to exercise significant influence over Vee. The carrying amount of the acquired shares was P6,000,000. The excess of cost over carrying amount was attributed to a depreciable asset which was undervalued on Vee's statement of financial position and which had a remaining useful life of 10 years. The investee reported net income of P1,800,000 and paid cash dividends of P400,000 and thereafter issued 5% share dividend during the current year. What amount should be reported as investment income for the current year?arrow_forwardRyan Limited acquired 80% of the shares in Tully Limited for $165 000. At acquisition date, share capital in Tully was $120 000 and reserves amounted to $40 000. All assets and liabilities of Tully were recorded at fair value at acquisition date except machinery which was recorded at $20 000 below fair value. The fair value of the NCI at the date of Ryan’s acquisition was $40 000 and the full goodwill method is adopted by the group. If the company tax rate was 30%, the total amount of goodwill recorded in relation to this business combination amounts to: a. $15 000 b. $31 000 c. $5 000 d. $26arrow_forwardAs a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Incorporated's 470,000 shares for $550,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC’s net assets were equal. During the year, AMC earned net income of $320,000 and distributed cash dividends of 20 cents per share. At year-end, the fair value of the shares is $582,000. Assume significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year. 1. Record the purchase of AMC Supplies shares for $550,000 as a long-term investment. 2. Record Painters' Equipment's share of AMC Supplies' $320,000 net income. 3. Record the cash dividend of 20 cents per share. 4. Record any necessary year-end adjusting journal entry when the fair value of the shares held are $582,000 at year-end.arrow_forward
- On January 1, Patterson Corporation acquired 80 percent of the 100,000 outstanding voting shares of Soriano, Inc., in exchange for $31.25 per share cash. The remaining 20 percent of Soriano’s shares continued to trade for $30 both before and after Patterson’s acquisition.At January 1, Soriano’s book and fair values were as follows:In addition, Patterson assigned a $600,000 value to certain unpatented technologies recently developed by Soriano. These technologies were estimated to have a three-year remaining life.During the year, Soriano declared a $30,000 dividend for its shareholders. The companies reported the following revenues and expenses from their separate operations for the year ending December 31.a. What amount should Patterson recognize as the total value of the acquisition in its January 1 consolidated balance sheet?b. What valuation principle should Patterson use to report each of Soriano’s identifiable assets and liabilities in its January 1 consolidated balance sheet?c.…arrow_forwardOn January 1, Paisley, Inc., paid $560,000 for all of Skyler Corporation’s outstanding stock. This cash payment was based on a price of $180 per share for Skyler’s $100 par value preferred stock and $38 per share for its $20 par value common stock. The preferred shares are voting, cumulative, and fully participating. At the acquisition date, the book values of Skyler’s accounts equaled their fair values. Any excess fair value is assigned to an intangible asset and will be amortized over a 10-year period. During the year, Skyler sold inventory costing $60,000 to Paisley for $90,000. All but $18,000 (measured at transfer price) of this merchandise has been resold to outsiders by the end of the year. At the end of the year, Paisley continues to owe Skyler for the last shipment of inventory priced at $28,000. Also, on January 2 Paisley sold Skyler equipment for $20,000 although it had a carrying amount of only $12,000 (original cost of $30,000). Both companies depreciate such property…arrow_forwardAt the start of the current year, SBC Corp. purchased 30% of Sky Tech Inc. for $45 million. At the time of purchase, the carrying value of Sky Tech's net assets was $75 million. The fair value of Sky Tech's depreciable assets was $15 million in excess of their book value. For this year, Sky Tech reported a net income of $75 million and declared and paid $15 million in dividends.The total amount of additional depreciation to be recognized by SBC over the remaining life of the assets is:arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub