On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P15 per share. On this date,XYZ's equity comprised of P50,000 share capital and P24,000 retained earnings. NCI was measured at its proportionate share in XYZ'snet identifiable assets.XYZ's assets and liabilities on January 1, 2021 approximate their fair values except for the following:CarryingатоuntsFairFair valueXYZ, Inc.values adjustments (FVA)InventoryEquipment (4 yrs. remaininglife)23,00031,0008,00010,00060,000(10,000) (12,000)63,00050,000Accumulated depreciationTotals(2,000)16,00079,000XYZ, Inc. declared and paid dividends of P10,000 during 2021. There was no impairment in goodwill. The year-end individualstatements of profit or loss are shown below:Statements of profit or lossFor the year ended December 31, 2021АВС Со.XYZ, Inc.Sales300,000120,000Cost of goods soldGross profitDepreciation expense(165,000)135,000(40,000)(32,000)(3,000)(72,000)48,000(10,000)(18,000)Distribution costsInterest expenseDividend income8,00068,00020,000Profit for the yearHow much is the consolidated profit to be reported on December 31,2021?

Solution- To calculate the goodwill the fair value of asset and liabilities of the acquired business…

in A net identifiable assets. XYZ's assets and liabilities on January 1, 2021 approximate their fair values except for the following: Carrying Fair Fair value XYZ, Inc. values adjustments (FVA) amounts 23,000 Inventory Equipment (4 yrs. remaining life) Accumulated depreciation Totals 31,000 8,000 50,000 60,000 (10,000) (12,000) 63,000 10,000 79,000 (2,000) 16,000 XYZ, Inc. declared and paid dividends of P10,000 during 2021. There was no impairment in goodwill. The year-end individual statements of profit or loss are shown below: Statements of profit or loss For the year ended December 31, 2021 АВС Со. XYZ, Inc. Sales 300,000 120,000