02) On 30 June 2010 Parent owns 80% of the share capital of Subsidiary. The non-controlling interest had a fair valueof $1,300,000. Extract from the statements of financial position of Subsidiary at 30 June 2014 are shown below:Statement of financial position:Ordinary shareShare premiumRetained earningsSelect one:O a. $1,220,000O b. $1,300,000O c. $1,480,000O d. $1,400,00030 June 2010$1,000,000400,0004,700,000Select one:O a. $225,000O b. $228,800O c.$223,400O d. $255,300What figure for non-controlling appear in the consolidated statement of financial position as at 30 June 20X611) On January 1, 2012 Peter Inc. acquired 80% of theoutstanding common stock of Sam Co. for $540,000.Sam's net assets had a book value $600,000 on that datealthough equipment with a ten-year life having a bookvalue of $10,000 had a fair market value of $30,000. Anyremaining allocation is to go to goodwill. On December31, 2012, Sam reports revenues of $125,000 andexpenses of $50,000 while Peter reports operatingrevenue of $400,000 and expenses of $250,000. What isthe consolidated net income for 2012?30 June 2014$1,000,000400,0005,600,000

Explanation:- At the time of acquisition = $1,300,000 % Post acquisition = (5,600,000– 4,700,000) x…

02) On 30 June 2010 Parent owns 80% of the share capital of Subsidiary. The non-controlling interest had a fair value of $1,300,000. Extract from the statements of financial position of Subsidiary at 30 June 2014 are shown below: Statement of financial position: Ordinary share Share premium Retained earnings 30 June 2010 $ 1,000,000 400,000 4,700,000 Select one: O a. $1,220,000 O b. $1,300,000 O c. $1,480,000 O d. $1,400,000 30 June 2014 $ 1,000,000 400,000 5,600,000 What figure for non-controlling appear in the consolidated statement of financial position as at 30 June 20X6

02) On 30 June 2010 Parent owns 80% of the share capital of Subsidiary. The non-controlling interest had a fair value of $1,300,000. Extract from the statements of financial position of Subsidiary at 30 June 2014 are shown below: Statement of financial position: Ordinary share Share premium Retained earnings 30 June 2010 $ 1,000,000 400,000 4,700,000 Select one: O a. $1,220,000 O b. $1,300,000 O c. $1,480,000 O d. $1,400,000 30 June 2014 $ 1,000,000 400,000 5,600,000 What figure for non-controlling appear in the consolidated statement of financial position as at 30 June 20X6

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 3, 2022, P Company acquired 70% interest in S Company for P4,200,000. Considerationincludes issuance of shares with fair value of P3,500,000 and cash for the balance. On this date, the equityof S Company is as follows: P. Company S CompanyOrdinary Share Capital 3,300,000 1,450,000Accumulated Profits 5,450,000 2,800,000Non-controlling interest is initially measured at fair value of P1,675,000. Fair value of the following assetsof S Company exceeded their book values: Inventories, P150,000; Fixed assets (remaining life – 5 years),P600,000. All other assets and liabilities are fairly valued.S Company sold an equipment to P Company for P200,000 carried in S’s book at P120,000 on July 1, 2022;remaining life is 4 years. Towards the end of the year, P sold to S merchandise costing P150,000 at 40%gross profit, 25% of these inventories was unsold as of balance sheet date. Also, P purchased inventoryfrom S…
On January 3, 2022, P Company acquired 70% interest in S Company for P4,200,000. Considerationincludes issuance of shares with fair value of P3,500,000 and cash for the balance. On this date, the equityof S Company is as follows:P. Company S CompanyOrdinary Share Capital 3,300,000 1,450,000Accumulated Profits 5,450,000 2,800,000Non-controlling interest is initially measured at fair value of P1,675,000. Fair value of the following assetsof S Company exceeded their book values: Inventories, P150,000; Fixed assets (remaining life – 5 years),P600,000. All other assets and liabilities are fairly valued.S Company sold an equipment to P Company for P200,000 carried in S’s book at P120,000 on July 1, 2022;remaining life is 4 years. Towards the end of the year, P sold to S merchandise costing P150,000 at 40%gross profit, 25% of these inventories was unsold as of balance sheet date. Also, P purchased inventoryfrom S amounting to P250,000 which includes mark-up of 20% based on cost. P sold to…
Parent Corporation acquired 80% of the outstanding shares of Subsidiary Company on June 1, 2021 for P3,517,500. Subsidiary Company’s stockholder’s equity components at the end of this year are as follows: Ordinary shares, P100 par, P1,500,000, Share premium P675,000 and Retained Earnings P1,335,000. Non-controlling interest is measured at fair value and the fair value is P705,000. The assets of Subsidiary Company were fairly valued, except for inventories, which are overstated by P66,000, and equipment, which was understated by P90,000. Remaining useful life of equipment is 4 years. Stockholder’s equity of Parent Corporation on January 1, 2021 is composed of Ordinary shares P4,500,000, Share premium P1,050,000, Retained Earnings P3,150,000. Goodwill, if any, should be written down by P85,350 at year end. Net Income for the first year of parent is P450,000 and the net income of Subsidiary Company from the date of acquisition is P255,000. Dividends declared at the end of the year…
On January 3, 2022, P Company acquired 70% interest in S Company for P4,200,000. Consideration includes issuance of shares with fair value of P3,500,000 and cash for the balance. On this date, the equity of S Company is as follows: P. Company S Company Ordinary Share Capital 3,300,000 1,450,000 Accumulated Profits 5,450,000 2,800,000 Non-controlling interest is initially measured at fair value of P1,675,000. Fair value of the following assets of S Company exceeded their book values: Inventories, P150,000; Fixed assets (remaining life – 5 years), P600,000. All other assets and liabilities are fairly valued. S Company sold an equipment to P Company for P200,000 carried in S’s book at P120,000 on July 1, 2022; remaining life is 4 years. Towards the end of the year, P sold to S merchandise costing P150,000 at 40% gross profit, 25% of these inventories was unsold as of balance sheet date. Also, P purchased…
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28 On February 28, 2022, P Corp. purchased 80% of S Co.’s P10 par ordinary shares for P986,000. On this date, the carrying amount of S’s net assets was P1,000,000. The fair values of S Co.’s identifiable assets and liabilities were the same as their carrying amounts except for inventory which is overvalued by P15,000 and plant assets (net), which were P120,000 in excess of the carrying amount. The estimated remaining life of the asset is 5 years. For the year ended December 31, 2022, S had net income of P354,000 and paid cash dividends to P Corp. of P112,000 (all coming from post-acquisition Retained Earnings). Loss on impairment of goodwill in 2022 amounted to P20,000. P Corp. uses the fair value method in measuring non-controlling interest. Revenues were earned evenly throughout the year Determine the non-controlling interest in net asset of subsidiary on December 31, 2022.
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