Investment in Shure 40000000 Retained earnings acquisition related expense

Investment in shure 40000000 retained earnings

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Investment in Shure…………………………………………………………… 40,000,000 Retained earnings (acquisition-related expense – close to retained since only balance sheet accounts are being examined) …………………………………………………………………… 1,000,000 Common stock, 1,000,000 x P1 par……………………………… 1,000,000 PIC in excess of par [(1,000,000 x P39) – P800,000) …………… 32,000,000 Cash (P800,000 + P1,000,000)…………………………………….. 1,800,000 Eliminating entries are: Book value of stockholders’ equity: Stockholders’ equity- Shure………………………………………………… 6,000,000 Investment in Shure………………………………………………… 6,000,000 Allocated excess (acquisition/purchase differential): Identifiable assets……………………………………………………………. 7,000,000 Long-term debt………………………………………………………………. 500,000 Goodwill………………………………………………………………… ……..28,500,000 Lawsuit liability………………………………………………………. 2,000,000 Investment in Shure………………………………………………… 34,000,000
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128. d –refer to No. 127 129. a 130. a Cost of Goods Sold P80,000 debit Depreciation Expense (P192,000/120) 7 = P11,200 debit 131. c Cost of Goods Sold (P60,000 x 4/6) = P40,000 debit Interest Expense: (P15,000/5) = P3,000 debit 132. a [(P250,000 - P180,000)/10]7 133. c [(P380,000 - P260,000)/120]88 134. No question available 135. a 136.c P170,000 - {[P320,000 - (P300,000 - P170,000)]/10}2 137.b [P320,000 - (P300,000 - P170,000)]/10 138.d 139.d P105,000 - {[P405,000 - (P450,000 - P105,000)]/20}2 140. a [P405,000 - (P450,000 - P105,000)]/20 141. d - The acquisition method consolidates assets at fair value at acquisition date regardless of the parent’s percentage ownership. 142. d P: BV,12/31/20x6 P250,000 S: BV of building, 12/31/20x4 P170,000 Add: Adjustments to reflect fair value, 1/1/20x4 (P350,000 – P240,000) 110,000 Less: Amortization of excess (P110,000/10) x 3 years 33,000 247,000 P497,000 143. b
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P: BV,12/31/20x5 P 975,000 S: BV of building, 12/31/20x5 P105,000 Add: Adjustments to reflect fair value, 1/4/20x4 (P120,000 – P90,000) 30,000 Less: Amortization of excess (P30,000/10) x 2 years 6,000 129,000 P1,104,000 144. c - An asset acquired in a business combination is initially valued at 100% acquisition-date fair value and subsequently amortized its useful life. Patent fair value at January 1, 20x4 ...................................... P45,000 Amortization for 2 years (10 year life) .................................. (9 ,000 ) Patent reported amount December 31, 20x5 ......................... P36 ,000 145. b BV of building, 1/1/20x4 P200,000 Adjustments to reflect fair value, 1/1/20x4 (P300,000 – P200,000) 100,000 Depreciation 1/1/20x4 – 12/31/20x6 (P100,000/20 x 3 years) ( 15,000) P285,000 146. d – same with No. 145 147. d BV of equipment, 1/1/20x4 P 80,000 Adjustments to reflect fair value, 1/1/20x4 (P80,000 – P75,000) ( 5,000) Depreciation 1/1/20x4 – 12/31/20x6 (P5,000/10 x 3 years) 1,500 P 76,500 148. a Adjustments to reflect fair value, 1/1/20x4 (P80,000 – P75,000) (P 5,000) Depreciation 1/1/20x4 – 12/31/20x6 (P5,000/10 x 3 years) 1,500 (P 3,500) 149. d – 1/2/20x4: BV of equipment, 1/1/20x4 P200,000
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Adjustments to reflect fair value, 1/1/20x4 (P300,000 – P200,000) 100,000 P300,000 150. b Decrease in Buildings account: Fair value……………………………………………P 8,000 Book value…………………………………………..
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