On January 1, 20x6, Parent Corporation purchased 80% of Subsidiary Company's outstanding stock forP620,000. At that date, all of Subsidiary's assets and liabilities had market values approximately equal to theirbook values and no goodwill was included in the purchase price. The following information was available for20x6: income from own operations of Parent, P150,000; operating loss of Subsidiary, P20,000. Dividends paidin 20x6 by Parent, P75,000; by Subsidiary to Parent, P12,000,On July 1, 20x6, there was a downstream sale of equipment at a gain of P25,000. The equipment is expectedto have a remaining useful life of 10 years from the date of sale. Also, on January 1, 20x6, there was anupstream sale of furniture at a loss of P7,500. The furniture is expected to have a useful life of five years fromthe date of sale. Non-controlling interest is measured at fair value.How much is the consolidated net income attributable to the parent shareholders' equity?

Consolidated financial statement Consolidated financial statement is the financial statement…

On January 1, 20x6, Parent Corporation purchased 80% of Subsidiary Company's outstanding stock for P620,000. At that date, all of Subsidiary's assets and liabilities had market values approximately equal to their

On January 1, 20x6, Parent Corporation purchased 80% of Subsidiary Company's outstanding stock for P620,000. At that date, all of Subsidiary's assets and liabilities had market values approximately equal to their

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter7: Corporations: Reorganizations

Section: Chapter Questions

Problem 43P

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On January 1, 20x6, Parent Corporation purchased 80% of Subsidiary Company's outstanding stock for P620,000. At that date, all of Subsidiary's assets and liabilities had market valu. approximately equal to their book valu. and no goodwill was includ. in the purchase price. The following information was available for 20x6: income from own operations of Parent, P150,000, operating loss of Subsidiary, P20,000. Dividends paid in 20x6 by Parent, P75,000; by Subsidiary to Parent, P12,000.1 On July 1, 20x6, there was a downstream sale of equipment at a gain of P25,000. The equipment is expected to have a remaining useful life of 10 years from the date of sale. Also, on January 1, 20x6, there was an upstream sale of furniture at a loss of P7,500. The furniture is expected to have a useful life of five years from the date of sale. Non-controlling interest is measured at fair value. How much is the consolidated net income attributable to the parent shareholders' equity?
Parent Company acquired 15% of Subsidiary Company’s common stock for P500,000 cash and carried the investment using the cost method. A few months later, Parent purchased another 60% of Subsidiary’s stock for P2,160,000. At that date, Subsidiary had identifiable assets of P3,900,000 and a fair value of P5,100,000, and had liabilities with a book value and fair value of P1,900,000. The fair value of the 25% non-controlling interest is P900,000.The amount of goodwill to be recognized resulting from this combination: A. 400,000 B. 84,000 C. 100,000 D. 300,000
On January 1, 20x1, Pine Corp acquired 75% interest in Sine Inc. for P2,400,000. On that date Sine Ordinary share and Retained earnings were P2,000,000 and P1,000,000. The non-controlling interest on the date of acquisition was P800,000. The assets and liabilities of Sine’s book values approximates their fair values except for the inventories and equipment which were undervalued by P30,000 and P50,000, respectively. The equipment has a remaining estimated life of five years. On October 1, 20x1, Sine Inc. sold equipment to Pine Corp. costing P300,000 with accumulated depreciation of P120,000 for P200,000. The remaining useful life of equipment was 4 years. In year 20x1, the goodwill is impaired by P5,000. On April 30, 20x2, Pine Corp. sold equipment to Sine Inc, costing P500,000 with accumulated depreciation P100,000 for P300,000. The remaining estimated life of equipment was five years. The following information were extracted from the separate financial statements of Pine and Sine for…
On January 2, 2022, Parent Company purchased 90% of the outstanding shares of Subsidiary Company by paying P300,000. On this date, Subsidiary had Share Capital and Retained Earnings amounting to P150,000 and P230,000 respectively. Also, on this date, an equipment was undervalued by P20,000 with remaining useful life of 10 years. On the same date, Parent had P1,000,000 of Share Capital and P700,000 of Retained Earnings. The parent opted to measure the NCI using proportionate share. Parent and Subsidiary reported the following for the year ended December 31, 2022 (see image below).On July 31, 2022, Parent sold a machinery with a 5-year remaining useful life costing P1,500,000 with accumulated depreciation of P1,000,000 for P530,000 to Subsidiary. Questions:a. How much is the Consolidated Retained Earnings at December 31, 2022? b. How much is the Consolidated Net Income? .....
On January 2, 2022, Parent Company purchased 90% of the outstanding shares of Subsidiary Company by paying P300,000. On this date, Subsidiary had Share Capital and Retained Earnings amounting to P150,000 and P230,000 respectively. Also, on this date, an equipment was undervalued by P20,000 with remaining useful life of 10 years. On the same date, Parent had P1,000,000 of Share Capital and P700,000 of Retained Earnings. The parent opted to measure the NCI using proportionate share. Parent and Subsidiary reported the following for the year ended December 31, 2022 (see image below).On July 31, 2022, Parent sold a machinery with a 5-year remaining useful life costing P1,500,000 with accumulated depreciation of P1,000,000 for P530,000 to Subsidiary. Questions: a. How much is the Net Income Attributable to Parent? b. How much is the Net Income Attributable to NCI? .......
Sing Company, a 80% owned subsidiary of Paint Corp., reported net income of P1,500,000 and paid dividends totaling P500,000 during Year 1. Amortization of the excess fair values over book values of identifiable net assets on the date of acquisition amounted to P220,000. What is the amount of non-controlling interest in consolidated net income of Sing in Year 1? A. P156,000 B. P256,000 C. P100,000 D. P56,000
Sing Company, a 80% owned subsidiary of Paint Corp., reported net income of P1,500,000 and paid dividends totaling P500,000 during Year 1. Amortization of the excess fair values over book values of identifiable net assets on the date of acquisition amounted to P220,000. What is the amount of non-controlling interest in consolidated net income of Sing in Year 1?
On January 1, 2018, Potter Corporation purchased 80% of Draco Company’s outstanding shares for $620,000. At that date, all of Draco Company’s assets and liabilities had market values approximately equal to their book values and no goodwill was included in the purchase price. The following information was available for 2018: Income from own operations of Parent, $150,000 Operating loss of Subsidiary, $20,000 Dividends paid in 2018 by Parent, $75,000 Dividends paid by Draco to Potter, $12,000 On July 1, 2018, there was a downstream sale of equipment at a gain of $25,000. The equipment is expected to have a remaining useful life of 10 years from the date of sale. Also, on January 1, 2018, there was an upstream sale of furniture at a loss of $7,500. The furniture is expected to have a useful life of five years from the date of sale. Non-controlling interest is measured at fair market value. How much is the consolidated net income attributable to parent shareholders’ equity? A. 97,250B.…
On January 1, 2016, Parent Company purchased for P6,500,000 65% of the outstanding shares of Subsidiary Company. On this date, the assets of Subsidiary Company have a book value P10,000,000 while their liabilities have book values of P2,000,000. All of Subsidiary Company’s assets approximated their book values except for Machinery and Land which were understated by P25,000 and P75,000 each respectively and a Liability which was overstated by P10,000. Parent and Subsidiary each have 100,000 shares outstanding and their shares are currently trading in the stock market at P250 and P125 per share to Parent and Subsidiary each, respectively. The non-controlling interest is valued at fair value. What is the goodwill/income from acquisition of Subsidiary Company?
At the beginning of current year, Cynosure Company purchased 30% of the ordinary shares of another entity for P3,500,000 when the net assets acquired amounted to P7,000,000 At acquisition date, the carrying amounts of the identifiable assets and liabilities of the investee were equal to their fair value, except for equipment for which the fair value was P1,500,000 greater than carrying amount and inventory whose fair value was P500,000 greater than cost. The equipment has a remaining life of 4 years and the inventory was all sold during the current year. The investee reported net income of P4,000,000 and paid P1,000,000 dividends during the current year. Required: 1. Prepare journal entries for the current year. 2. Compute the investment income for the current year.
On January 1, 20X1, Rabb Corp. purchased 80% of Sunny Corp.'s $10 par common stock for $975,000. On this date, the carrying amount of Sunny's net assets was $1,000,000. The fair values of Sunny's identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net), which were $100,000 in excess of the carrying amount. In the January 1, 20X1, consolidated balance sheet, goodwill should be reported at ____. a. $0 b. $75,750 c. $95,000 d. $118,750
Simple Company, a 70%-owned subsidiary of Punter Corporation, reported net income of P240,000 and paid dividends totalling P90,000 during Year 3. Year 3 amortization differences between current fair values and carrying amounts of Simple’s identifiable net assets at the date of business combination was P45,000. The non-controlling interest in net income of Simple for Year 3 was P58,500 P13,500 P27,000 P72,000