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- PROBLEM 2. On January 1, 2018, Inside Out Corporation had 30,000 ordinary shares of UP Company purchased at a total amount of P1,800,000, which includes directly attributable costs of P30,000. The shares were irrevocably designated to present changes in fair value through other comprehensive income. On December 31, 2018, the UP shares were selling at P65 per share. In July 2019, Inside Out Corporation received a 20% bonus issue. Subsequently, it sold 15,000 shares at P70 per share. Market value of UP ordinary at December 31, 2019 was P72 per share. At what amount should the Investment be shown on the December 31, 2019 Statement of Financial Position?PROBLEM 2. On January 1, 2018, Inside Out Corporation had 30,000 ordinary shares of UP Company purchased at a total amount of P1,800,000, which includes directly attributable costs of P30,000. The shares were irrevocably designated to present changes in fair value through other comprehensive income. On December 31, 2018, the UP shares were selling at P65 per share. In July 2019, Inside Out Corporation received a 20% bonus issue. Subsequently, it sold 15,000 shares at P70 per share. Market value of UP ordinary at December 31, 2019 was P72 per share. What amount shall be reported in the 2019 Profit or Loss? (If loss input negative sign.)On March 1, 2022, Dolor Company purchased 5,000 shares of Susan Incorporated paying P12 each share including P2 per share transaction cost. The shares were designated as financial asset through other comprehensive income. These shares are selling at P15 per share on December 31, 2022. How much is the amount of unrealized gain (loss) in comprehensive income for the period ending December 31, 2021?
- On July 1, 2019, GAR Company acquired 800,000 shares of FAR Company at a price of P13 per share. GAR estimated that the price paid include P1.50 premium in order to gain control over FAR Company. On this date, the fair values of FAR Company’s identifiable assets and liabilities and their carrying values are given below: Book Value Fair ValueCurrent assets P2,000,000 P2,000,000Property, plant and equipment 9,000,000 11,000,000Liabilities P3,000,000 Ordinary shares, P5 par 5,000,000 Retained earnings 3,000,000 Determine the amount of goodwill assuming the non-controlling interest is measured at the proportionate share in the net assets:4. On January 1, 2019, Lallo Company purchased 15% of Vintar Company’s ordinary shares for P20,000,000. The following data concerning Vintar Company are available: 2019 2020 Net income P6,000,000 P7,000,000 Cash dividend paid None 15,000,000 In its income statement for the year ended December 31, 2020, how much should Lallo report as income from this investment? Group of answer choices P1,950,000 P600,000 P700,000 P2,250,000PROBLEM IL. On January 1, 2019, William Corp. (qualifies as SME) paid cash of P600,000 for the 80% of the outstanding shares of Kate Company. The carrying value of the assets and liabilities of Kate on January 1, 2019 follow: Accounts Receivable P90,000 Inventory 180,000 Plant & Equipment (net of Accumulated Depreciation of P220,000) 320,000 Goodwill 100,000 Liabilities 120,000 On January 1, 2019, Kate inventory had a fair value of P150,000 and plant & equipment (net) had a fair value of P380,000. Cost of arranging the combination are as follows: legal fees for combination, P30,000; finder's fee, P50,000; other miscellaneous direct costs, P20,000. Net income of William and Kate for 2019 amounts to P158,000 and P60,000, respectively. William received dividend of P18,000 from Kate during 2019. The PPE has original useful life of 10 years and was already held for 4 years as of date of acquisition. 1. On December 31, 2019, what is the consolidated net income? 2. How much is the carrying…
- 6. On January 1, 2020, PQR Company purchased 40,000 shares of Frank, Inc. at P100 per share. The investment is measured at fair value through other comprehensive income. Brokerage fees amounted to P120,000 were also paid by PQR. A P5 dividend per share was declared by Frank, Inc. on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. What is the initial measurement of the investment in Frank, Inc.?Marcus Company made the following transactions in the ordinary shares of Cato Company designated as a financial asset at fair value through profit or loss: July 16, 2018 - Purchased 10,000 shares at P45 per share. | June 28, 2019- Sold 2,000 shares for P51 per share. May 18, 2020 - Sold 2,500 shares for P33 per share. The end-of-year market prices for the shares were as follows: December 31, 2018 - P47 per share December 31, 2019 - P39 per share December 31, 2020 - P31 per share 1. How much should be recognized in 2020 profit or loss as a result of the fair value changes? (use negative sign if your answer is a loss) 2. How much should be recognized as realized gain on sale for the year ended December 31, 2020? (use negative sign if your answer is a loss) 1. 2.On January 1, 2019, Lallo Company purchased 15% of Vintar Company's ordinary shares for P20,000,000. The following data concerning Vintar Company are available: 2019 2020 Net income P6,000,000 P7,000,000 Cash dividend paid None 15,000,000 In its income statement for the year ended December 31. 2020, how much should Lallo report as income from this investment? O P2,250.000 O P600.000 O P700.000 O P1.950.000
- Blush Company has the ability to exercise significant when the fair value of net assets was P20,000,000. outstanding ordinary shares of an investee for P4,000,000 On July 1, 2020 Blush Company purchased 20% of the influence over the operating and financial policies of the investee. The following data concerning the investee are available: 12 months ended December 31, 2020 December 31, 2020 6 months ended Net income Dividend declared and paid 3,000,000 1,900,000 1,600,000 1,000,000 in the income statement for the year ended December 31, o020, what amount of income should be reported from the investment?On December 31, 2021, the Bobo company presented the following information: Ordinary share capital, P50 par P6,000,000 Share premium 300,000 Retained earnings (1,200,000) The company decided to undergo quasi reorganization. As a result, the company’s property, plant and equipment with cost of P8,000,000 and book value of P4,000,000 has recoverable amount of P3,000,000. Also, inventory would be written down by P300,000. The company will redeem its P50 par value ordinary shares and will issue equal number of ordinary shares with P30 par value. Based on the foregoing, determine balance of share premium after the quasi reorganization.10. On January 2, 2021, X Co. acquired all the ordinary share of Y Co. for P2,060,000. On that date, Y Co. reported the following stockholders’ equity account balances: Ordinary share P800,000, Share premium P620,000, accumulated profits P300,000. The assets and liabilities of Y Co had book values that were approximately equal to its fair values, except building that was undervalued by P400,000, and equipment that was overvalued by P120,000. The building that was undervalued has an estimated life of 20 years and the equipment with 5 years useful life. Prior to acquisition, Y Co. has unimpaired goodwill in the amount of P10,000. What is the amount of goodwill to be reported in the consolidated Statement of Financial Position?
