Reference no: EM132894423
PROBLEM - On January 1, 2020, THUNDER Company acquired a 10% interest in an investee for 3,000,000. The investment was accounted for using the cost method.
On January 1, 2021, the entity acquired further a 15% interest in the investee for 6,450,000. On such date, the carrying amount of the net assets of the investee was 36,000,000 and the fair value of the 10% interest is 4,200,000. The fair value of the net assets of the investee is equal to carrying amount except for an equipment whose fair value exceeds carrying amount by 4,000,000. The equipment has a remaining life of 5 years.
The investee reported net income of 7,000,000 for 2020 and paid dividends of 3,500,000.
Required -
1. How much income is to be recognized with regards to the investment on 2020?
2. What is the gain on re-measurement to equity to be recognized for 2021?
3. What is the goodwill arising from the acquisition on January 1, 2021?
4. How much is the investment income on 2021?
5. What is the carrying amount of the investment in associate on December 31, 2021?
|
What are major benefits of developing composite stock-bond
: For the semi-strong form EMH tests, identify the applications that could be concluded from applying the event studies.What are major benefits of developing
|
|
Calculate the earnings per share for the year
: No dividends were declared during the year. Net income for the year was $1,200,000. Calculate the earnings per share for the year
|
|
What is the cost of ownership
: What is the cost of ownership when you're building a scheduling system for the hospital in the short term and in the long term?
|
|
What is annual rate of interest being charged to hospital
: Given this rate of interest, what are some reasons on why or why not the hospital should accept this lease contract. Is this a good deal for the lessee?
|
|
What is the carrying amount of the investment
: The investee reported net income of 7,000,000 for 2020 and paid dividends of 3,500,000. What is the carrying amount of the investment
|
|
Cryptocurrencies eventually replace national currencies
: Could bitcoin and other cryptocurrencies eventually replace national currencies?
|
|
How many shares would be the balance of investment of alpha
: How many shares would be the balance of investment of Alpha with Bravo after the property dividends were distributed to its shareholders?
|
|
Do think in case would be acceptable
: Do you think, in this case, it would be acceptable to include evidence from these prior situations in your investigation to ensure an arrest and conviction
|
|
Development of a new low-featured and low-priced offering
: A firm currently offers a single product within the product category. The product management team is considering the development of a new low-featured and low-p
|