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    Chapter17 Buenaventura

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    Anonn
    1. The document records transactions for multiple companies' investments in associates. It records the acquisition costs, shares in net income/losses, cash dividends received, revaluation surpluses, excess values, and amortization of excess values over several years. 2. Key details include Boorish Company recording investment income from its associate over 2020-2021. Cynosure Company records excess values for equipment and inventory upon acquisition. Czar Company records a revaluation surplus for its investee. 3. The document provides information to calculate carrying amounts of investments in associates at year-end for each company based on acquisition costs and annual share transactions.

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    Chapter17 Buenaventura

    Uploaded by

    Anonn
    24 views8 pages
    1. The document records transactions for multiple companies' investments in associates. It records the acquisition costs, shares in net income/losses, cash dividends received, revaluation surpluses, excess values, and amortization of excess values over several years. 2. Key details include Boorish Company recording investment income from its associate over 2020-2021. Cynosure Company records excess values for equipment and inventory upon acquisition. Czar Company records a revaluation surplus for its investee. 3. The document provides information to calculate carrying amounts of investments in associates at year-end for each company based on acquisition costs and annual share transactions.

    Original Description:

    Intermediate Accounting1

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    1. The document records transactions for multiple companies' investments in associates. It records the acquisition costs, shares in net income/losses, cash dividends received, revaluation surpluses, excess values, and amortization of excess values over several years. 2. Key details include Boorish Company recording investment income from its associate over 2020-2021. Cynosure Company records excess values for equipment and inventory upon acquisition. Czar Company records a revaluation surplus for its investee. 3. The document provides information to calculate carrying amounts of investments in associates at year-end for each company based on acquisition costs and annual share transactions.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    24 views8 pages

    Chapter17 Buenaventura

    Uploaded by

    Anonn
    1. The document records transactions for multiple companies' investments in associates. It records the acquisition costs, shares in net income/losses, cash dividends received, revaluation surpluses, excess values, and amortization of excess values over several years. 2. Key details include Boorish Company recording investment income from its associate over 2020-2021. Cynosure Company records excess values for equipment and inventory upon acquisition. Czar Company records a revaluation surplus for its investee. 3. The document provides information to calculate carrying amounts of investments in associates at year-end for each company based on acquisition costs and annual share transactions.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 8

    Boorish Company

    Required Debit Credit


    2020
    Jan-01 Investment in associate 5,000,000
    Cash 5,000,000

    Investment in associate 1,200,000


    Investment income (30% x 4,000,000) 1,200,000

    Cash (30% x 3,000,000) 900,000


    Investment in associate 900,000

    Investment income 200,000


    Investment in associate (1,000,000/5) 200,000

    2021
    Dec-31 Investment in associate 1,800,000
    Investment income (30% x 6,000,000) 1,800,000

    Cash (30% x 5,000,000) 1,500,000


    Investment in associate 1,500,000

    Investment income 200,000


    Investment in associate 200,000
    Cynosure Company

    Required Debit Credit

    1 Investment in associate 3,500,000


    Cash 3,500,000

    2 Investment in associate 1,600,000


    Investment income (40% x 4,000,000) 1,600,000

    3 Cash (40% x 1,000,000) 400,000


    Investment in associate 400,000

    4 Investment income 150,000


    Investment in associate (600,000/4) 150,000

    Cost 3,500,000
    Carrying amount of net assets acquired (40% x 7,000,000) 2,800,000
    Excess of cost over carrying amount 700,000
    Excess attributable to equipment (40% x 1,500,000) -600,000
    Excess attributable to inventory (40% x 500,000) -200,000
    Excess net fair value over cost -100,000

    5 Investment income 200,000


    Investment in associate 200,000

    6 Investment in associate 100,000


    Investment income 100,000

    Share in net income 1,600,000


    Amortization of excess attributable to equipment -150,000
    Amortization of excess attributable to inventory -200,000
    Excess net fair value over cost 100,000
    Net investment income 1,350,000
    Czar Company

    Required1 Debit Credit

    a. Investment in associate 1,700,000


    Cash 1,700,000

    b. Investment in associate 260,000


    Investment income (40% x 650,000) 260,000

    c. Cash (40% x 150,000) 60,000


    Investment in associate 60,000

    d. Investment in associate 520,000


    Revaluation surplus-investee (40 % x 1,300,000) 520,000

    *
    a. Cost 1,700,000
    Interest acquired (40% x 4,000,000) 1,600,000
    Goodwill not amortized 100,000

    b. There is no need to adjust for the difference in depreciation method.


    If both entities as method that best reflects the flow of benefits as the assets are consumed, then there
    is no policy difference.

    Required2

    Acquisition cost 1,700,000


    Share in net income 260,000
    Share in cash dividend -60,000
    Share in revaluation surplus 520,000
    Carrying amount-December 31, 2019 2,420,000
    d, then there
    Disgust Company

    Required1 Debit Credit

    a. Investment in associate 6,000,000


    Cash 6,000,000

    b. Investment in associate 750,000


    Investment income 750,000

    c. Cash 450,000
    Investment in associate 450,000

    d. Investment income 200,000


    Investment in associate 200,000

    Required2

    Share in net income 750,000


    Amortization of patent (2,000,000/10) -200,000
    Investment income 550,000

    Required3

    Acquisition cost 6,000,000


    Investment income 550,000
    Share in cash dividend (3,000,000 x 15%) -450,000
    Carrying amount 6,100,000

    Interest acquired (30,000/200,000) 15%

    Acquisition cost 6,000,000


    Carrying amount of net assets acquired 4,000,000
    Excess of cost applicable to patent 2,000,000
    Beta Company

    Required1
    Share in 2020 net income 900,000
    Amortization of excess (400,000/20) -20,000
    Investment income for 2020 880,000

    Acquisition cost (20,000 x 120) 2,400,000


    Net assets acquired (25 % x 8,000,000) 2,000,000
    Excess of cost 400,000

    Required2
    Share in 2021 net income 975,000
    Amortization of excess 20,000
    Investment income for 2021 950,000

    Required3
    Acquisition cost 2,400,000
    Share in net income
    2020 (25 % x 3,600,000) 900,000
    2021 (25x 3,900,000) 975,000
    Share in cash dividend:
    2020 (20,000 x 16) -320,000
    2021 (20,000 x 20) -400,000
    Amortization of excess
    2020 (400,000/20) -20,000
    2021 -20,000
    Carrying amount-12/31/2020 3,515,000
    Divine Company

    Required1 Debit Credit

    1 Investment in associate 6,500,000


    Cash 6,500,000

    2 Loss from investment 1,600,000


    Investment in associate (40 % x 4,000,000) 1,600,000

    3 Cash (40% x 2,500,000) 1,000,000


    Investment in associates 1,000,000

    4 Loss from investment 150,000


    Investment in associate 150,000

    Acquisition cost 6,500,000


    Carrying amount of net assets acquired (40% x 12,500,000) 5,000,000
    Excess attributable to equipment 1,500,000

    Amortization (1,500,000/10) 150,000

    Required2
    Acquisition cost 6,500,000
    Share in net loss -1,600,000
    Share in cash dividend -1,000,000
    Amortization of excess -150,000
    Carrying amount- 12/31/2020 3,750,000
    Angelic Company

    Required Debit Credit

    2017 Investment in associate 7,000,000


    Cash 7,000,000

    Loss from investment 2,000,000


    Investment in associate (40% x 5,000,000) 2,000,000

    2018 Loss from investment 2,800,000


    Investment in associate (40 % x 7,000,000) 2,800,000

    2019 Advances to associate 2,000,000


    Cash 2,000,000

    Loss from investment 3,200,000


    Investment in associate 2,200,000
    Advances to associate 1,000,000

    2020 Loss from investment 1,000,000


    Advances to associate 1,000,000

    Acquisition cost 7,000,000


    Cash advances 2,000,000
    Total investment 9,000,000
    Net loss from 2017 to 2019 (40% x 20,000,000) 8,000,000
    Carrying amount of investment- 12/31/2019 1,000,000

    Share in net loss of 2020 (40% x 4,000,000) 1,600,000

    Loss to be reported in 2019 should be equal to the carrying


    amount of the investment only. 1,000,000

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