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Determine the balance of angel investment in sanfer

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Reference no: EM132892381

On 3 January 2014, Angels Company purchased 40% of the outstanding common stock of Sanfer Company paying P1,280,000 when the book value of the net assets of Sanfer Company equaled P2,500,000. The difference is attributable to equipment, which had a book value of P600,000 and a fair value of P1,000,000, and to buildings, with a book value of P500,000 and a fair market value of P 800,000. The remaining useful life of the equipment and the buildings was 4 years and 12 years, respectively. During 2014, Sanfer reported net income of P800,000 and paid dividends of P 500,000. Give the entries to record the purchase in 2014 and reflect Angels' share of Sanfer's earnings and receipt of dividends for 2014.

Required:

Question (1) Give the journal entries made by Angels Company during 2014 related to its investment in Sanfer Company.

Question (2) Determine the balance of Angel's Investment in Sanfer as of 31 December 2014.

Question (3) Reconcile Sanfer Company's stockholders' equity with Angel's Investment in Sanfer as of 31 December 2014.

Reference no: EM132892381

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