a.
Introduction: Consolidation is the process of combining financial results of various subsidiaries with the financial results of parent company. It is used only when parent company holds more than 50% of share of subsidiary company.Dividend is the part of profit of the company which company distributes it to its shareholders such as equity shareholders and preference shareholders. It is the expense of company and is eliminated from the
The percent of dividends paid by S company to be shown in consolidated financial statements.
b.
Introduction: Consolidation is the process of combining financial results of various subsidiaries with the financial results of parent company. It is used only when parent company holds more than 50% of share of subsidiary company.Dividend is the part of profit of the company which company distributes it to its shareholders such as equity shareholders and preference shareholders. It is the expense of company and is eliminated from the retained earnings of the company.
The percent of dividends paid by P company to be shown in consolidated retained earnings.
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Advanced Financial Accounting
- Illustration 1. Share-for-share exchangesOn January 1, 2022, Frank Co. and Richard, Inc. combined. As of this date, the fair values of the assets, liabilities and equity of Frank and Richard before the business combination are as follows: On the negotiation for the business combination, the acquirer incurred the followingtransaction costs: P45,000.00 for legal fees; P 5,000.00 for due diligence cost and P 80,000.00 for the general admin cost and cost of maintaining an internal acquisition department. Case 1: before the transaction, Frank, Co. have 7,000 outstanding shares. Frank Co. Issued additional 10,000 shares as consideration for a 100% interest in Richard. Frank’s shares currently sells P150 per share in the market, while Richard’s shares are quoted at P200 per share. With the stated facts, answer the following: 4. How much is the Non-Controlling Interest in the acquiree?a. P 0.00b. P 150,000.00c. P 310,000.00d. P 500,000.005. How much is the previously held equity interest in…arrow_forwardIllustration 1. Share-for-share exchangesOn January 1, 2022, Frank Co. and Richard, Inc. combined. As of this date, the fair values of the assets, liabilities and equity of Frank and Richard before the business combination are as follows: On the negotiation for the business combination, the acquirer incurred the followingtransaction costs: P45,000.00 for legal fees; P 5,000.00 for due diligence cost and P 80,000.00 for the general admin cost and cost of maintaining an internal acquisition department. Case 1: before the transaction, Frank, Co. have 7,000 outstanding shares. Frank Co. Issued additional 10,000 shares as consideration for a 100% interest in Richard. Frank’s shares currently sells P150 per share in the market, while Richard’s shares are quoted at P200 per share.With the stated facts, answer the following: 1. How much is the goodwill (gain on bargain purchase) on the business combination?…arrow_forwardIllustration 1. Share-for-share exchanges On January 1, 2022, Frank Co. and Richard, Inc. combined. As of this date, the fair values of the assets, liabilities and equity of Frank and Richard before the business combination are as follows: On the negotiation for the business combination, the acquirer incurred the following transaction costs: P45,000.00 for legal fees; P 5,000.00 for due diligence cost and P 80,000.00 for the general admin cost and cost of maintaining an internal acquisition department. Case 1: before the transaction, Frank, Co. have 7,000 outstanding shares. Frank Co. Issued additional 10,000 shares as consideration for a 100% interest in Richard. Frank’s shares currently sells P150 per share in the market, while Richard’s shares are quoted at P200 per share. With the stated facts, answer the following: 1.How much is the Share Premium of the combined company after the business combination?a. P 730,000.00b. P 1,230,000.00c. P 800,000.00d. P 1,700,000.002.How much is…arrow_forward
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