Valix Finacc vol 1 Problem 11-21 to 25

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 11-21 to 25

Problem 11-21 Answer  B

Investment income (20% x 1,600,000)                                                                          320,000

                                                                                                      

Problem 11-22  Answer  A

Investment income (20% x 6,000,000)                                                                        1,200,000

Problem 11-23  Answer  C

Interest (30,000/100,000)                                                                                                     30%

Investment income (5,000,000 x 6/12 x 30%)                                                                750,000

 

Problem 11-24  Answer  C

Cost                                                                                                                           4,000,000                                                                                  

Less: Net assets acquired (40% x 8,000,000)                                                                3,200,000

Excess of cost or goodwill                                                                                            800,000

Share in net income from April 1 to December 31 (1,000,000 x 9/12 x 40%)                 300,000

Problem 11-25  Answer  B

Acquisition cost                                                                                                         7,000,000

Share in net income (20% x 1,800,000)                                                             360,000

Share in cash dividend (20% x 600,000)                                                                     (   120,000)

Amortization of excess (1,000,000/10)                                                                       (   100,000)

Carrying value                                                                                                           7,140,000