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  • Chapter 14

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    Kiminosunoo Lel
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    1. The document shows the investment in an associate over two years. On January 1, 20X1 the investment was $900,000. On December 31, 20X1 the investment was $1,170,000 after receiving a $500,000 share of profits and $150,000 in cash dividends. 2. The investment in an associate on January 1, 20X1 was $1,200,000. On December 31, 20X1 the investment was $1,635,000 after receiving a $525,000 share of profits and $210,000 in cash dividends. 3. The investment details the initial $500,000 investment, a $500,000 share

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    CHAPTER 14

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    1. The document shows the investment in an associate over two years. On January 1, 20X1 the investment was $900,000. On December 31, 20X1 the investment was $1,170,000 after receiving a $500,000 share of profits and $150,000 in cash dividends. 2. The investment in an associate on January 1, 20X1 was $1,200,000. On December 31, 20X1 the investment was $1,635,000 after receiving a $525,000 share of profits and $210,000 in cash dividends. 3. The investment details the initial $500,000 investment, a $500,000 share

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    12 views5 pages

    Chapter 14

    Uploaded by

    Kiminosunoo Lel
    1. The document shows the investment in an associate over two years. On January 1, 20X1 the investment was $900,000. On December 31, 20X1 the investment was $1,170,000 after receiving a $500,000 share of profits and $150,000 in cash dividends. 2. The investment in an associate on January 1, 20X1 was $1,200,000. On December 31, 20X1 the investment was $1,635,000 after receiving a $525,000 share of profits and $210,000 in cash dividends. 3. The investment details the initial $500,000 investment, a $500,000 share

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 5

    1.

    )
    Investment in associate 900,000.00
    Jan.1,20x1 Cash

    Investment in associate 500,000.00


    Dec,31,20x1
    Share in profit of associate
    Cash 150,000.00
    Dec,31,20x1
    Investment in associate

    Investment in associate
    1/1/x1 900,000
    Sh. In 20x1 profit 500,000 150,000 Cash Dividends
    80,000
    1,170,000 12/31/x1

    2.)

    Investment in associate 1,200,000


    Jan.1,20x1 Cash

    Investment in associate 525,000.00


    Dec,31,20x1
    Share in profit of associate
    Cash 210,000.00
    Dec,31,20x1
    Investment in associate

    3.)

    Investment in associate 500,000.00


    Share in profit of associate 500,000.00
    Cash 25,000
    Investment in associate 25,000
    Investment in associate 20,000.00
    Unrealize Gain (80k*25% 20,000.00
    Investment in associate
    1,000,000
    500,000
    20,000 25,000
    1,495,000

    4.)
    Book Value 8,000,000.00
    Over(300k-400k) - 100,000.00
    Under (1.8-1.5) 300,000.00
    FV of net Asset 8,200,000.00
    Interest Acquired 0.20
    FV of net Asset Acquired 1,640,000.00

    Purchase Cost 1,600,000.00


    Less:FV of net asset 1,640,000.00
    Goodwill - 40,000.00

    Share in associate profit Investment Association


    600,000.00 1,600,000
    Overvaluation 600000
    20,000.00 20000
    Undervaluation 12000 100000
    12,000.00 2,132,000
    Total Share in Associate
    = 632,000.00
    5.)
    Carrying Amount (900,000*40%)
    900,000.00
    Plant 36,000.00
    Inventory 4,000.00
    500,000.00 Total Goodwill 40,000.00

    150,000.00 Amortization of Goodwill

    Plant (36k/8 yrs life) 2,000.00


    Inventory 4,000.00
    Total 6,000.00
    Net income 120,000*40%
    Cash Dividends 20,000*40%

    6.)

    1,200,000

    525,000.00
    7.)
    210,000.00 Investments 108,000
    Share in Profit 108,000

    Cash 12,000
    Divedends 12,000

    516,000
    108,000
    12,000
    612,000

    8.)
    50,000/300,000
    = 0.1666666667
    Share profit 3,300,000*0.16666667
    550,000
    Dividends
    180,000*1.6666667
    300000

    1,200,000
    550,000 30,000
    1,720,000
    360,000.00
    Income Statement
    48,000.00 Gain
    6,000.00
    42,000.00 Net income
    Balansheet:
    (36k+48k-8k) 400,000.00 Adams Investment
    (40k-6k) 34,000.00 Goodwill
    Net Value 434,000.00

    48,000.00
    8,000.00

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