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1. kol Company acquired a financial asset as its market value of Php5,000,000. Broker fees of Php500,000 were incurred in relation to the purchase. What amount should initially be recognized for the financial asset, if it is classified as at FVOCI?
2.
n January 1, 2019, Blackpink Company purchased 10% of anther entity’s outstanding ordinary shares of P6,000,000. The following data pertain to the investee’s operations for 2019 and 2020.
2019 2020
Net income 2019 -3,000,000 2020-4,000,000
Dividend Income 2019 -None 2020- 9,000,000
What amount should be reported as dividend income in 2020?
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- On October 1, Dennis Company purchased ₱200,000 face value, 12% bonds at 98 plus accrued interestand brokerage fees and classified them as amortized cost assets. Interest is paid semiannually on January1 and July 1. Brokerage fees for this transaction were ₱700. At what amount should this acquisition ofbonds be recorded?Z Corporation has the following transactions relating to its investment during 2020: Jan 5 Acquired 16,000 shares of Y company for P1,500,000 paying an additional P10,000 for brokerage and P5,000 for commission. Feb 14 Received dividends from Y company declared January 10,2020 to the stockholders of records January 31,2020, P16,000. Required:prepare all the necessary entries assuming the investment is 1. Financial asset at Fair Value through profit and loss 2. Financial asset at Fair Value through other comprehensive incomeA Company acquired the assets and assumed the liabilities of B Inc. on June 30, 2022. The consideration transferred by the acquirer were as follows: • Cash amounting to P2,000,000. • Issued 10,000 ordinary shares at P10 par with a market price of P15. • Issued 5 year interest bearing bonds payable with a face value of P3,000,000 with a nominal rate of 10% and effective interest of 12%. (use two decimal places for the present value factor) Acquisition related costs incurred were as follows: • Legal fees amounting to P120,000, 70% of which is not yet paid. • Share issue costs paid amounted to P15,000. • Bond Issue costs paid amounting to P120,000. The Balance Sheet of the two entities before acquisition were as follows: A Company B Inc.Total Assets 16,500,000 5,235,000Total Liabilities 2,500,000 500,000Ordinary Shares 5,000,000 1,250,000Share premium 1,500,000 750,000Retained Earnings 6/30/22 7,500,000 2,735,000It was determined that the book value of the assets and liabilities of the…
- A Company acquired the assets and assumed the liabilities of B Inc. on June 30, 2022. The consideration transferred by the acquirer were as follows: • Cash amounting to P2,000,000. • Issued 10,000 ordinary shares at P10 par with a market price of P15. • Issued 5 year interest bearing bonds payable with a face value of P3,000,000 with a nominal rate of 10% and effective interest of 12%. (use two decimal places for the present value factor) Acquisition related costs incurred were as follows: • Legal fees amounting to P120,000, 70% of which is not yet paid. • Share issue costs paid amounted to P15,000. • Bond Issue costs paid amounting to P120,000. The Balance Sheet of the two entities before acquisition were as follows: A Company B Inc.Total Assets 16,500,000 5,235,000Total Liabilities 2,500,000 500,000Ordinary Shares 5,000,000 1,250,000Share premium 1,500,000 750,000Retained Earnings 6/30/22 7,500,000 2,735,000It was determined that the book value of the assets and liabilities of the…BTS Co. was incorporated on January 1, 2021. The following were the transactions during the year:• Total consideration from share issuances amounted to ₱4,000,000.• A land and building were acquired through a lump sum payment of ₱800,000. A mortgage amounting to ₱200,000 was assumed on the land and building. • Total payments of ₱160,000 were made during the year on the mortgage assumed on the land and building. The payments are inclusive of interest amounting to ₱20,000. • Additional capital of ₱400,000 was obtained through bank loans. None of the bank loans were paid during the year. Half of the bank loans required a secondary mortgage on the land and building. • There is no accrued interest as of year-end. • Dividends declared during the year but remained unpaid amounted to ₱120,000. • No other transactions during the year affected liabilities.• Retained earnings as of December 31, 2021 is ₱240,000.How much is the total assets as of December 31, 2021?How much is the profit for the…BT21 Co. was incorporated on January 1, 2021. The following were the transactions during the year:• Total consideration from share issuances amounted to ₱4,000,000.• A land and building were acquired through a lump sum payment of ₱800,000. A mortgage amounting to ₱200,000 was assumed on the land and building. • Total payments of ₱160,000 were made during the year on the mortgage assumed on the land and building. The payments are inclusive of interest amounting to ₱20,000. • Additional capital of ₱400,000 was obtained through bank loans. None of the bank loans were paid during the year. Half of the bank loans required a secondary mortgage on the land and building. • There is no accrued interest as of year-end. • Dividends declared during the year but remained unpaid amounted to ₱120,000. • No other transactions during the year affected liabilities.• Retained earnings as of December 31, 2021 is ₱240,000.How much is the total assets as of December 31, 2021?
- BT21 Co. was incorporated on January 1, 2021. The following were the transactions during the year:• Total consideration from share issuances amounted to ₱4,000,000.• A land and building were acquired through a lump sum payment of ₱800,000. A mortgage amounting to ₱200,000 was assumed on the land and building. • Total payments of ₱160,000 were made during the year on the mortgage assumed on the land and building. The payments are inclusive of interest amounting to ₱20,000. • Additional capital of ₱400,000 was obtained through bank loans. None of the bank loans were paid during the year. Half of the bank loans required a secondary mortgage on the land and building. • There is no accrued interest as of year-end. • Dividends declared during the year but remained unpaid amounted to ₱120,000. • No other transactions during the year affected liabilities.• Retained earnings as of December 31, 2021 is ₱240,000.How much is the profit for the year?The following selected account balances were taken from the balance sheet of Q Corp. as of December 31, 2021, immediately before the take over of the trustee; Marketable securities P300,000; Inventories P110,000; Land P150,000; Building P400,000; Marketable securities have present market value of P320,000. These securities have been pledged to secure notes payable of P280,000. The estimated worth of inventories of P70,000. However, inventories with book value of P50,000 have been pledged to secure notes payable of P60,000. The realizable value of the inventories pledged estimated to be P40,000. The land and building are estimated to have a total realizable value of P450,000. This property was pledged to secure the mortgage payable of P250,000. What is the amount available for preferred claims and unsecured creditors out of assets pledged with fully secured creditors? Please provide a solution. Thank you!Melon Co. was incorporated on January 1, 2021. The following were the transactions during the year:• Total consideration from share issuances amounted to ₱4,000,000.• A land and building were acquired through a lump sum payment of ₱800,000. A mortgage amounting to ₱200,000 was assumed on the land and building. • Total payments of ₱160,000 were made during the year on the mortgage assumed on the land and building. The payments are inclusive of interest amounting to ₱20,000. • Additional capital of ₱400,000 was obtained through bank loans. None of the bank loans were paid during the year. Half of the bank loans required a secondary mortgage on the land and building. • There is no accrued interest as of year-end. • Dividends declared during the year but remained unpaid amounted to ₱120,000. • No other transactions during the year affected liabilities.• Retained earnings as of December 31, 2021 is ₱240,000.How much is the profit for the year?
- On 1 July 2019, Brad Ltd acquired all assets and liabilities of Pitt Ltd. In exchange for these assets and liabilities, Brad Ltd issued 100,000 shares that at date of issue had a fair value of $5.20 per share. Costs of issuing these shares amounted to $1,000. Legal cost associated with the acquisition of Pitt Ltd amounted to $1,200.The assets and liabilities of Pitt Ltd at 1 July 2019 were as follows:Carrying Amount ($) Fair Value ($)AssetsCash 2,000 2,000Accounts receivable 10,000 10,000Inventory 64,000 68,000Equipment 320,000 232,000Accumulated depn - Equipment (96,000) -Patents 280,000 280,000LiabilitiesAccounts payable (16,000) (16,000)Debentures (64,000) (64,000)Required:a) Prepare the acquisition analysis at 1 July 2019 for the acquisition of Pitt Ltd by Brad Ltd.b) Prepare the journal entries in the records of Brad Ltd at 1 July 2019.AsapThe balance sheet of the proprietorship of Jacob as of June 30, 2018 showed the following assets andliabilities:Cash P 40,000Accounts Receivable 53,600Inventory 88,000Equipment 65,600Accounts Payable 63,520The cash balance included a 200- share certificate of BW Resources common at acquisition cost of P 1,600; the current market quotation is 70 per share. Of the accounts receivable, an estimated 5% is considered to be doubtful of collection. Certain inventory items, booked at a cost of P22,960, are currently worth P16,000. Depreciation has not been recorded; the equipment, acquired two years ago, has a remaining useful life of about eight more years. Prepaid expense of P 12,800 and accrued expense of P 6,120 have not been properly recognized. Emily and Bert will join Jacob in a partnership. Jacob will invest the net assets of his business, after effecting the appropriate adjustments, and he will be allowed credit for goodwill equal to 10% of his initial capital credit. Emily and Bert…
