help in homework

New User?

Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / 1

1

Accounting

1. Papilon Corporation acquired 90,000 shares of the 100,000 outstanding no-par ordinary share capital of Silicon Company for a price of P1,200,000 on January 1, 2011 at the time when Silicon Company had book and fair values as shown below. Papilon Corporation also paid P96,000 direct acquisition costs in the form of legal fees to outside consultants.  

Ordinary Share Capital

P480,000

Accumulated Profits

600,000

Total net assets at book value

P1,080,000

Add: Differences between current fair value and book value

  

Inventories (FIFO)

36,000

Property and Equipment

72,000

Total current fair value of identifiable net assets

P1,188,000

Required:

  1. Prepare journal entries for Papilon Corporation on January 1, 2011 to record the acquisition of share from Silicon Company.
  2. Prepare the required elimination entries in general journal form that are needed for a consolidated statements worksheet for a consolidated statement of financial position for Papilon Corporation and subsidiary on January 1, 2011

2. The following are selected account balances from Cheela Company and Jarjar Corporation as of December 31, 2018:

 

Cheela

Jarjar

Revenues

P    980,000

P    560,000

Expenses

560,000

420,000

Dividend Income

84,000

  

Dividends Paid

112,000

84,000

Accumulated profits, 1/1/18

840,000

280,000

Current Assets

560,000

700,000

Building (net)

1,260,000

560,000

Equipment (net)

840,000

1,400,000

Investment in Jarjar Corp.

         ?

  

Liabilities

700,000

1,932,000

Ordinary Shares

840,000

(P20 par)

280,000

(P10 par)

Share Premium

210,000

112,000

On January 1, 2018, Cheela acquired all of the outstanding shares of Jarjar for P298,000 in cash and ordinary shares. Cheela also pays P24,000 in lawyers’ fees and other combination costs as well as P14,000 in share issuance costs. At the date of acquisition, Jarjar’s buildings (with a six-year remaining life) have a P616,000 book value and a fair market value of P784,000.

Required:

Prepare the consolidated statements worksheet and present all elimination entries that would have been included in the consolidated statements worksheet to prepare a full set of consolidated financial statements for the year 2018.

3. The Nathan Company acquired all of the outstanding stock of Caleb Company on January 1, 2014 for P267,800 cash. Caleb had a book value of only P182,000 on that date. However, equipment (having an eight-year life) is undervalued by P52,000 on Caleb’s financial records. A building with a 20-year life was overvalued by P13,000. Subsequent to the acquisition, Caleb reported the following:

 

Net Income

Dividends Paid

2014

P 65,000

P 13,000

2015

78,000

52,000

2016

39,000

26,000

In accounting for this investment, Nathan has used the cost method. Selected accounts taken from the financial records of these two companies as of December 31, 2016, are as follows:

 

Nathan Company

Caleb Company

Revenues – Operating

P403,000

P135,200

Expenses

257,400

96,200

Equipment (net)

416,000

65,000

Building (net)

286,000

88,400

Ordinary share

377,000

65,000

Accumulated profits

533,000

208,000

Required:

Determine the following account balances as of December 31, 2016.

  1. Net Income Attributable to Equity Holders of the Parent
  2. Non-controlling Interest in Net Income of Subsidiary
  3. Consolidated Net Income
  4. Consolidated Equipment (net)
  5. Consolidated Buildings (net)
  6. Consolidated Goodwill (net)
  7. Consolidated Ordinary Shares
  8. Consolidated Accumulated Profits

 

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

1. Please use this google drive link to download the answer file.       

https://drive.google.com/file/d/11yazdaVj2y-h9PTj0heBS006FlSCXIjY/view?usp=sharing

Note: If you have any trouble in viewing/downloading the answer from the given link, please use this below guide to understand the whole process. 

https://helpinhomework.org/blog/how-to-obtain-answer-through-google-drive-link.

2. a) Value of the shares of Jarjar Corporation as on date of acquisition:

Current Assets 700000
Buildings 784000
Equipment 1400000
Total Assets 2884000
Less: Liabilities 1932000
Net Asset value of the company 952000

Amount paid by Cheela Company to acquire the shares

Payment in cash 298000
Lawyer cost 24000
Share issuance cost 14000
Total cost of acquisition(A) 336000
Net asset value of the company(B) 952000
Capital Reserve(B)-(A) 616000

b) Elimination entries

1.

Dividends paid (Jarjar Corporation) Dr 84000

To DIvidend Income 84000

2.Share Capital (Jarjar Corporation) Dr 280000

Share premium (jarjar Corporation) Dr 112000

To Investments in Jarjar Corporation 336000

To Capital Reserve 56000.

3. 1. Net income attributable to equity shareholders of parenf are:

Revenues - Operating expenses

P4,03,000 - P2,57,400= P1,45,600

Net Income attributable to equity shareholdera is P1,45,600

2. Non- Controlling interest would be 0 since Nathan has acquired all the outstanding shares of Caleb Company.

3. Considated net income = Net income of Caleb company + Net income of Nathan company

Consolidate net income= P39,000 i.e. ( P1,35,200 - P96,200) + P1,45,600 i.e. (P4,03,000 - P2,57,400)

=P1,84,600

4. Consildated equipment (net) = P4,16,000 + P65,000

= P4,81,000

5. Consolidated Buildings (net) = P2,86,000 + P88,400

= P3,74,400

6. Consolidated Goodwill (net)= Consideration paid by parent + Non controlling interest - fair value of subsidiary net identifiable assets

=P2,67,800 + 0 - P1,53,400

=P1,14,400

7. Consildated ordinary shares = P4,42,000

8. Consolidated accumulated profits= P5,33000 + P2,08000

= P7,41,000

Sitejabber (5.0)

BBC (5.0)

Trustpilot (4.9)

Google (5.0)