An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct acquisition costs incurred were P140,000. On 31 December 2020 the fair value of the instrument was P1,100,000 and the transaction costs that would be incurred on sale were estimated at P120,000. If the investment is designated as FA@FVTOCI, what gain would be recognized in the financial statements for the year ended 31 December 2020? Group of answer choices A) P420,000 B) P160,000 C) Nil D) P40,000
Q: YA Inc. wishes to transfer its equity investments initially classified as fair value through other…
A: Other Comprehensive Income consists the expenses, gains, revenues, and also losses, which does not…
Q: On July 1, 2019, Parent Company acquired the net assets of Subsidiary Company for a consideration…
A: When an entity purchases or acquires another entity then after this acquisition, a new…
Q: An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct…
A: Cost of equity instrument = P800,000 + P140,000 = P940,000 Fair value = P1,100,000
Q: On January 1, 2021 CCC acquired all of the identifiable assets and assumed all liabilities of DDD by…
A: The value of goodwill arise on excess payment of consideration over the net identifiable assets. Net…
Q: The value of the net assets of Adom Plc as disclosed on the statement of financial position at 31…
A: Fair value of business means market value or estimated fair value of business assets and…
Q: On January 1, 2019, an entity purchased 25% of the outstanding ordinary shares of another entity for…
A:
Q: Company acquired equity securities during the year 2018 and designated as fair value to other…
A: Investment in shares is the investment which is done by the investor to get gain by the increase in…
Q: Determine the unrealized gain/loss on December 31, 2021? Determine the net gain/loss…
A: 1.Unrealized profit or losses refer to profits or losses that have not occurred in actual but has…
Q: During 2020, Strawberry Corporation purchased several equity securities, all of which are designated…
A:
Q: On January 1, 2020, Tam acquired 15% of outstanding common stocks of Tum at a price of P120,000 and…
A: On 01.01.2020, Tam acquired Tum outstanding common stocks = 15% Price = P120000 Cost of acquisition…
Q: On January 1, 2019, Blackpink Company purchased nontrading equity securities. On December 31, 2019,…
A: Since you have asked two different questions under a single question, kindly resubmit another…
Q: Difficult Company acquiredan equity instrument for P3,600,000 on March 31, 2020 to be measured at…
A: Given that: Acquisition costs = P3,600,000 Direct costs incurred = P630,000 At the end, Fair value…
Q: January 1, 2021 CCC acquired all of the identifiable assets and assumed all liabilities of DDD by…
A: The calculation of purchase consideration is as follows: Purchase Consideration=Cash Payment+Fair…
Q: 4. An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct…
A: When fair value of the instruments is more the acquisition cost, then gain on the values of…
Q: Strawberry Corp. has various equity investment at fair value through profit or loss transactions…
A: As per IFRS 9, Financial instruments, those investments for which fair value through profit or loss…
Q: On January 1, 2021, Jeremiah Company purchased trading equity investments which are irrevocably…
A: Unrealized profit or losses refer to profits or losses that have not occurred in actual but has…
Q: An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct…
A: Acquisition cost on Mar 31,2020 = Purchase price + direct acquisition costs = 800,000 + 140,000 =…
Q: On July 1, 2019, Parent Company acquired the net assets of Subsidiary Company for a consideration…
A: Answer:- When an entity purchases or acquires another entity then after this acquisition, a new…
Q: During 2021, Manu Company purchased shares of stock classified as short-term investment to be…
A: Unrealized gain or loss is the increase or decrease in the value of an asset that is still to be…
Q: During 2020, Strawberry Corporation purchased several equity securities, all of which are designated…
A: Here discuss about the purchase and sale of share investment which are made through the fair value…
Q: In 2019, Josiah Company purchased nontrading equity in investments which are irrevocably designated…
A: Answer: As per IFRS 9, Financial instruments, there are two different methods for classification of…
Q: Gera Corporation owns two financial investments in the shares of listed companies. Details of which…
A: The details of two investments made by the company are as follows: Investment 1 – Acquired on…
Q: On January 1, 2019, an entity purchased 25% of the outstanding ordinary shares of another entity for…
A: Excess of cost over the carrying amount of net assets acquired (Jan 1, 2019):
Q: On January 1, 2021, Jeremiah Company purchased trading equity investments which are irrevocably…
A: Income statement is the financial statement that shows income and expenditure. It is also known as…
Q: 1. kol Company acquired a financial asset as its market value of Php5,000,000. Broker fees of…
A: transaction price= Invested money+legal fees+other cost-recoveries.
Q: . What is the gain on remeasurement to equity to be recognized for 2021? a. 1,500,000 b. 4,500,000…
A: Therefore, option (a) is the correct answer.
Q: Question: The total amount reported in 2019 profit or loss is? On January 1, 2019, an entity…
A: INVESTMENT IN SHARES OF ANOTHER COMPANY IS RECORDED AS AN ASSET IN SEPERATE FINANCIAL STATEMENT OF…
Q: On its December 31, 2020, balance sheet, Cullumber Company reported its investment in equity…
A: Investment in equity securities means that one company is holding the share of another company. Fair…
Q: Splendid Company purchased equity securties during 2020 to be heid as investments. The cost and…
A: Financial Management: Financial management comprises of two words i.e. Finance and management.…
Q: what gain would be recognized in the financial statements for the year ended 31 December 2020?
A: The direct acquisition costs incurred is considered as part of purchase value of equity instrument.…
Q: On January 1, 2021, an entity purchased marketable equity securities for P5,000,000. The equity…
A:
Q: On July 1, 2019, Parent Company acquired the net assets of Subsidiary Company for a consideration…
A: When an entity purchases or acquires another entity then after this acquisition, a new surviving…
Q: An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct…
A: Company means the form of business where management is separately from owner and have perpetual…
Q: At the beginning of the current year, Jason Company acquired non-trading equity instrument for…
A: Solution: Cost of equity instruments = P4,000,000 + P700,000 = P4,700,000 Fair value of instrument…
Q: An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct…
A: As per FVTOCI the transaction cost incurred are to added to cost of investment only on initial…
Q: uestion: What is the 2019 net investment income?
A: Calculation of Fair Value of investment as on 31 Dec 2019 Particulars Amount Carrying…
Q: Gera Corporation owns two financial investments in the shares of listed companies. Details of which…
A: The details of investment of a company are as follows: Investment 1 – Acquired on September 1,…
Q: Jon company owns two financial investments in the shares of listed companies. With the following…
A: The details of investment of a company are as follows: Investment 1 – Acquired on September 1,…
Q: On January 1, 2019, FFF Company acquired a 10% interest in an investee for P3,000,000. The…
A: Carrying amount: The carrying amount is the recorded cost of an asset, net of any accumulated…
Q: Corporation’s Retained Earnings at December 31, 2021 amounted to P2,000,000. On that date, the…
A: The retained earnings are decreased with declaration of dividend to shareholders. The dividend can…
Q: 5. In 2020, the entity purchased the following equity securities for the purpose of selling them in…
A: Equity Securities An instrument that represents a claim on a corporation's assets and profits and…
Q: what gain would be recognized in the financial statements for the year ended 31 December 2020?
A: The gain to be recognized in the financial statements is based on purchase value of investment and…
Q: January 1, 2021, ABC acquired a 10% interest in an investee for P3,000,000. The investment was…
A: This is the method of an accounting which is used by a company to record the profits earned through…
Q: On January 1, 2019, an entity acquired a 10% interest in an investee for 3,000,000. The investment…
A:
Q: On January 1, 2019, FFF Company acquired a 10% interest in an investee for P3,000,000. The…
A: Solution- Particulars Amount $ Existing 10% Interest Remeasured at fair value 4500000 New 15%…
Q: The following are summarized Balance Sheets as on March 31, 2020 H. Ltd. acquired 80% shares in S…
A: Calculation of Goodwill Fair Value of Consideration Transferred $2,000 Non Controlling interest…
Q: MEME Corporation’s Retained Earnings at December 31, 2021 amounted to P2,000,000. On that date, the…
A: Dividend is the part or share of profits which is divided among the shareholders of the company. For…
Q: On January 1, 2019, FFF Company acquired a 10% interest in an investee for P3,000,000. The…
A: Solution- Particular Amount $ Fair value of 10% Interest 4500000 Historical cost 3000000…
Q: Luxemburg Company purchased the following investments during 2021:…
A: Luxemburg Company purchased the investments in 2021 are : Security A Cost = P180000 Transaction cost…
Q: On January 1, 2019, an entity purchased 15,000 shares of another entity representing a 12% interest…
A: Profit and loss Account In the profit and loss account which includes all type of revenues and…
An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct acquisition costs incurred were P140,000.
On 31 December 2020 the fair value of the instrument was P1,100,000 and the transaction costs that would be incurred on sale were estimated at P120,000.
If the investment is designated as FA@FVTOCI, what gain would be recognized in the financial statements for the year ended 31 December 2020?
Step by step
Solved in 2 steps with 1 images
- 1. What is the gain on remeasurement to equity to be recognized for 2021?a. 1,500,000b. 4,500,000c. 2,250,000d. 0 2. What is the goodwill arising from the acquisition on January 1, 2021?a. 2,250,000b. 1,250,000c. 1,350,000d. 350,000 3. What is the carrying amount of the investment in associate on December 31, 2021?a. 11,250,000b. 11,800,000c. 12,000,000d. 14,300,000E3.5 Acquisition analysis, including fair value adjustment for plant and equipment (Section 3.6.2) On 1 October 20XO, EF Ltd acquired all the issued ordinary shares of GH Ltd. The terms of the acquisition agreement specified that EF Ltd must pay the existing shareholders of GH Ltd $1.5million immediately and a further $1.5million on 30 September 20X1. The incremental cost of short-term finance to EF Ltd is 10% p.a. At acquisition date, the issued capital and reserves of GH Ltd were as follows: Issued capital 1 200000 Retained eamings 1/10/20X0 1400000 At 1 October 20xO, the plant and equipment of GH Ltd had a carrying amount that was $150000 less than its fair value. The company income tax rate is 30%. REQUIRED (a) Prepare the general journal entries for the accounting records of EF Ltd to record: (i) the investment in GH Ltd on 1 October 20X0 (ii) the cash payment of the $1500 000 on 30 September 20X1.11. The following information pertains to Nonagon Company's biological assets at December 31, 2021: Price of assets in an active market , P 5,000,000 Estimated broker's and dealer's commissions, P 50,000 Transport and other costs expected to be incurred to bring the assets to the market, P 40,000 Selling price in a binding sale agreement, P 5,100,000 At what amount should the biological assets be presented on the statement of financial position?
- Classification 1. An entity invests in a pool of assets that is managed by an investment house. In accordance with the entity's business model, the investment will be held until it matures in 10 years' time, at which date the entity will collect the principal amount in the investment together with the interest earned. In accordance with the principles of PFRS 9, the entity will most likely measure the investment at c. FVOCI (Mandatory). d. FVOCI (Election). a. Amortized cost. b. FVPL. 2. An entity plans to purchase a new machine in a few years' time. The cost of the new machine is significant. To address this, the entity invests in debt securities. The entity's investment management strategy is to hold the investment and collect the investment income in the form of interest. However, when opportunity arises, the entity sells the investment in order to realize fair value gain. The entity reinvests any proceeds from sales until the date of purchase of the new machine. In accordance with…Following is a list of items relating to the financial statements of YKN Bhd for the year ended 31December 2020• Amortisation of intangible assets of RM346,339• Corporate tax rate is at 24%.• Finance costs of RM831,138• Finance income of RM173,421• Gain due to exchange differences from translating functional currencies into presentationcurrency of RM120,000• Gain on disposals of major subsidiaries amounted to RM1,500• Gain on sales of manufacturing operating segment of RM100,000• Gains on re-measuring available-for-sale investment of RM80,000• Loss on litigation settlements of RM2,125,000• Loss amounted to RM450,000 due to disposal of its cotton mills, which constitute amajor line of business• Loss arising from translating the financial statements of a foreign operation of RM33,000• Loss from disposal of financial assets of RM50,000• Loss on disposals of items of property, plant and equipment of RM34,000• Loss on impairment of goodwill of RM110,000• Loss on re-measuring financial…Following is a list of items relating to the financial statements of YKN Bhd for the year ended 31December 2020• Amortisation of intangible assets of RM346,339• Corporate tax rate is at 24%.• Finance costs of RM831,138• Finance income of RM173,421• Gain due to exchange differences from translating functional currencies into presentationcurrency of RM120,000• Gain on disposals of major subsidiaries amounted to RM1,500• Gain on sales of manufacturing operating segment of RM100,000• Gains on re-measuring available-for-sale investment of RM80,000• Loss on litigation settlements of RM2,125,000• Loss amounted to RM450,000 due to disposal of its cotton mills, which constitute amajor line of business• Loss arising from translating the financial statements of a foreign operation of RM33,000• Loss from disposal of financial assets of RM50,000• Loss on disposals of items of property, plant and equipment of RM34,000• Loss on impairment of goodwill of RM110,000• Loss on re-measuring financial…
- Multiple choice: 1. Entity A had total assets of ₱120M and total liabilities of ₱80M at the beginning of the period. If at the end of the period, total assets increased by ₱30M, while total liabilities remained the same, Entity A’s total equity at the end of the period would be A. ₱70M B. ₱60M C. ₱90M D. ₱80M 2. Recording assets at their acquisition cost (entry value), rather than at their net selling price (exit value), is in line with the concept of A. Going concern concept B. Single entity concept. C. Matching principle. D. Historical cost concept.An entity, with an investment in debt securities carried as FVOCI, deemed its original business model as not applicable starting November 30, 2020, and decided to reclassify its investment as FVPL. Which of the following statements is true? A. The reclassification shall be made on November 30, 2020; the investment is transferred at fair value from FVOCI to FVPL; the cumulative gain or loss previously recognized in OCI is transferred to profit or loss B. The reclassification shall be made on January 1, 2021; the investment is transferred at fair value from FVOCI to FVPL; the cumulative gain or loss previously recognized in OCI is transferred to profit or loss C. The reclassification shall be made on January 1, 2021; the investment is transferred at fair value from FVOCI to FVPL; the cumulative gain or loss previously recognized in OCI is transferred to retained earnings D. The reclassification shall be made on November 30, 2020; the…1. Assuming the investment is appropriately recognized as financial assets at amortized cost: What is the carrying value of the investment on December 31, 2020? 2. Assuming the investment is appropriately recognized as financial assets at amortized cost: Determine the gain or (loss) to be recorded upon the sale of the investment. 3. Assuming the investment is appropriately recognized as financial assets at amortized cost: How much interest income is to be recognized in 2021?
- 6. Tulip Company purchased the net assets of another entity for P2,000,000. On the sate of the transaction, the acquire had P800,000 of liabilities The assets of the acquiree at fair value were $1,900,000 for current assets and P1,600,000 for noncurrent assets. What is the amount of gain on bargain purchase? a. P 700,000 b. P-700,000 c. P 800,000 d. P-800,000If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: REQUIREMENTS:A. GoodwillB. Consolidated Total Assets at the date of acquisitionC. Consolidated Total Liabilities at the date of acquisitionD. Consolidated Equity at the date of acquisitionAn entity acquired a 30% interest in another entity in Year I. In Year 2, it acquired another 50% equity interest in the same entity. Which of the following statements is valid?a. The entity's per-existing 30% equity interest should be remeasured at fair value at the acquisition date.b. The entity's net assets should be remeasured at fair value at acquisition date.
