Reference no: EM133187359
Question 1 - On January 1, 2022, JPIA Corporation has a subsidiary in Hong Kong. The subsidiary's December 31, 2022 Trial Balance, in Hong Kong Dollar (HK$), is as follows:
|
|
DEBIT
|
CREDIT
|
|
Cash
|
18,000
|
|
|
Accounts receivable (net)
|
30,000
|
|
|
Inventory
|
37,500
|
|
|
Plant & equipment
|
150,000
|
|
|
Accumulated Depreciation
|
|
15,000
|
|
Accounts payable
|
|
18,000
|
|
Bonds payable
|
|
75,000
|
|
Ordinary Share
|
|
90,000
|
|
Sales
|
|
225,000
|
|
Cost of Sales
|
105,000
|
|
|
Depreciation expenses
|
15,000
|
|
|
Operating expenses
|
45,000
|
|
|
Dividends paid
|
22,500
|
|
|
|
423,000
|
423,000
|
Additional Information: Purchases of inventory goods were made evenly during the year. The dividends were declared and paid on November 1. The ordinary shares were issued on January 1, 2022. The functional currency of the subsidiary is the Hong Kong dollar. Exchange rates were as follows:
|
|
HK$
|
PHP
|
|
January 1
|
1.00
|
5.30
|
|
March 1
|
1.00
|
5.40
|
|
November 1
|
1.00
|
5.50
|
|
December 31
|
1.00
|
5.00
|
|
Average rate - 2022
|
1.00
|
5.40
|
Required - Determine the cumulative translation adjustment loss (debit)?
Question 2 - On January 1, 2020, Julius Company acquired 40% interest in Ella Company for P4,800,000. Julius already had 25% interest which had been acquired for P1,600,000. The fair value of the identifiable net assets of Ella Co. was P8,800,000.
Required - How much is the goodwill recognized by Julius as a result of business combination?