On December 1, 2020, Citrus purchased 200,000 shares representing 45 percent of the outstanding stock of Berry for cash of P2,500,00O. As a resul this purchase, Citrus has the ability to exercise significant influence over the operating and financial policies of Berry. 45 percent of the profit of Berry amounted to P20,000 for the month of December and P350,000 for the year ended December 31, 2020. On January 15, 2021, cash dividends of PO.30 p share were paid to shareholders of record on December 31, 2020. Citrus'

On December 1, 2020, Citrus purchased 200,000 shares representing 45 percent of the outstanding stock of Berry for cash of P2,500,00O. As a resul this purchase, Citrus has the ability to exercise significant influence over the operating and financial policies of Berry. 45 percent of the profit of Berry amounted to P20,000 for the month of December and P350,000 for the year ended December 31, 2020. On January 15, 2021, cash dividends of PO.30 p share were paid to shareholders of record on December 31, 2020. Citrus'

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 14RE

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Sunny Co purchased 20,000 shares in Peter Co on 1 August 2020 at a cost of $6.0 each. Transaction costs on the purchase amounted to $2,000. At the year-end 30 September 2021, these shares are now worth $7.50 each. What is the gain to be recognized for the year ended 30 Sep 2021 and where it will be recorded according to two cases: (1) Shares held for sales (2) Shares held to collect contractual cash flows and sell them.
Jackson Inc. purchased 30,000 shares of common stock of the Pixel Corporation for $10 per share on January 2, 2020. During 2020, Pixel had 100,000 shares of common stock outstanding, reported net income of $200,000, and paid cash dividends of $100,000. The fair value of Pixel stock on December 31, 2020 is $12 per share. On December 31, 2020, what will Jackson report on its Balance Sheet for its investment in Pixel? How much revenue should Jackson report for 2020 on its investment in Pixel? Round your answers to the nearest whole number. Dot not use dollar signs($) or commas(,). Blank # 1 Blank # 2
On January 1, 2020, Red Company purchased 80% of the common stock of Al-Yasa Company by issuing 10,000 shares of its (AI-Maha) OMR15 par value common stock with a market price of OMR25 per share. Al-Naba incurred cash expenses of OMR 8,000 for registering and issuing the common stock. The stockholders' equity sections of the two companies' balance sheets on December 31, 2019, were: Al-Yasa Al-Maha Common Stock, OMR15 par value OMR 350,000 OMR240,000 Other Contributed Capital 590,000 80,000 Retained Earnings 380,000 130,000 Required: A. Prepare the journal entry(s) on the books of Al- Maha Company to record the purchase of the common stock of Moon Company and related expenses. B. Prepare the elimination entry(s) required for the preparation of a consolidated balance sheet work paper on the date of acquisition.
On October 1, 2019, Michael Company purchased 30,000 shares of Jackson Company at P180 per share that reflected book value as of that date. At the time of the purchase, Jackson had 100,000 ordinary shares outstanding. Michael had no ownership interest in Jackson before the purchase. The nine months ending September 30, 2019 of Jackson recorded profit of P2,960,000. For the year ended December 31, 2019, Jackson reported profit of P4,800,000. Jackson paid Michael dividends of P120,000 on December 31, 2019.For the year 2020. Jackson reported profit of P2,800,000 and paid dividends of P 1,700,000 to its ordinary shareholders.On January 2, 2021, Michael sold 20,000 ordinary shares of Jackson for P250 per share. For year ended December 31, 2021, the reported profit of Jackson was P4,000,000 and dividends of P40,000 was paid to Michael. Market value of the remaining shares at this time is P2,300,000.What Is the investment carrying value at December 31. 2020? a. P6,162,000 b. P5,970,000…
On October 1, 2019, Michael Company purchased 30,000 shares of Jackson Company at P180 per share that reflected book value as of that date. At the time of the purchase, Jackson had 100,000 ordinary shares outstanding. Michael had no ownership interest in Jackson before the purchase. The nine months ending September 30, 2019 of Jackson recorded profit of P2,960,000. For the year ended December 31, 2019, Jackson reported profit of P4,800,000. Jackson paid Michael dividends of P120,000 on December 31, 2019.For the year 2020. Jackson reported profit of P2,800,000 and paid dividends of P 1,700,000 to its ordinary shareholders.On January 2, 2021, Michael sold 20,000 ordinary shares of Jackson for P250 per share. For year ended December 31, 2021, the reported profit of Jackson was P4,000,000 and dividends of P40,000 was paid to Michael. Market value of the remaining shares at this time is P2,300,000. What Is the amount at which the investment is reported on the statement of financial position…
On 1 October 2018, KING acquired 30,000 of VAM's 100,000 shares in exchange for 75,000 of its own shares. The market value of KING's shares at the date of this share exchange was $3.20 per share. VAM's net profit for the financial year ended 31 March 2019 was $200,000. $40,000 of this profit was made by VAM from 1 April 2018 to 30 September 2018. VAM is the only associate of KING. What amount will be shown as 'investment in associate' in the consolidated statement of financial position of KING as at 31 March 2019? Please provide explaination. A) $288,000 B) $300,000 C) $156,000 D) $252,000 E) None of the above
On June 1, 2020, Ping Corp. purchased 10,000 of Pong's 50,000 outstanding shares at a price of P6.00 per share. Pong had earnings of P3,000 per month during 2020 and paid dividends of P10,000 on March 1, 2020 and P12,500 on December 1, 2020. The fair value of Pong's shares was P6.50 per share on December 31, 2020. Which statement is correct? O Assuming that the investment is FVTPL, the total effect on Ping's profit or loss for the year ended December 31, 2020 is P2,500 O Assuming that the investment is FVTOCI, the total effect on Ping's profit or loss for the year ended December 31, 2020 is P7,500. O Assuming that the investment is an associate, the total effect on Ping's profit or loss for the year ended December 31, 2020 is P3,600. O After all closing entries for 2020 are completed, the effect of the increase in fair value on total shareholders' equity would be the same amount under the FVTOCI and FVTPL approaches.
On January 1, 2020, Alice Company purchased 40,000 shares of Jasper at P100 per share. The investment is measured at fair value through other comprehensive income. Brokerage fees amounted to P120,000. A P5 dividend per share of Jasper had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. No other transactions occurred in 2020 affecting the investment in Jasper's share. What is the initial measurement of the investment?
On January 2, 2020, Theodora Company purchased 40,000 shares of Byzantine, Inc. stock at P100 per share. Brokerage fees amounted to P120,000. A P5 dividend per share of Byzantine, Inc. shares had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. The shares are designated as FVTOCI. On December 31, 2020 the investment has a fair value of P4,200,000. How much should be recognized in the 2020 other comprehensive income related to these securities? P80,000 P400,000 P280,000 P200,000
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On January 2, 2021, Sanborn Tobacco Inc. bought 5% of Jackson Industry’s capital stock for $90 million. Jackson Industry’s net income for the year ended December 31, 2021, was $120 million. The fair value of the shares held by Sanborn was $98 million at December 31, 2021. During 2021, Jackson declared a dividend of $60 million.Required:1. Prepare all appropriate journal entries related to the investment during 2021.2. Assume that Sanborn sold the stock on January 2, 2022 for $110 million. Prepare the journal entry Sanborn would use to record the sale.
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?