On January 1, 20x8,Parent Company purchased 80% of the outstanding shares of Subsidiary Company for P800,000. On the date of acquisition, Subsidiary Company reported Ordinary Shares of P800,000 and Retained Earnings of P200,000. Subsidiary's Inventory was understated by P20,000; Equipment with a 5-year life was understated by P20,000, Building with an 8-year life was understated by P80,000 and land was understated by P40,000. The non-controlling interest is to be stated at fair value and the fair value of the non-controlling interest on January 1, 20x8 is P210,00O. The following are taken from the books of Parent and Subsidiary for 20x8. * Subsidiary 2,000,000 1,500,000 350,000 150, 000 50,000 Parent Sales 550,000 200,000 100,000 Gross Profit Net Income Dividend Declared (to be paid on Jan 15, 20x9) Total Assets 5,000,000 4,000,000 Determine the Total Assets as of December 31, 20x8.

On January 1, 20x8,Parent Company purchased 80% of the outstanding shares of Subsidiary Company for P800,000. On the date of acquisition, Subsidiary Company reported Ordinary Shares of P800,000 and Retained Earnings of P200,000. Subsidiary's Inventory was understated by P20,000; Equipment with a 5-year life was understated by P20,000, Building with an 8-year life was understated by P80,000 and land was understated by P40,000. The non-controlling interest is to be stated at fair value and the fair value of the non-controlling interest on January 1, 20x8 is P210,00O. The following are taken from the books of Parent and Subsidiary for 20x8. * Subsidiary 2,000,000 1,500,000 350,000 150, 000 50,000 Parent Sales 550,000 200,000 100,000 Gross Profit Net Income Dividend Declared (to be paid on Jan 15, 20x9) Total Assets 5,000,000 4,000,000 Determine the Total Assets as of December 31, 20x8.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 38P

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On January 1, 20x8, Parent Company purchased 80% of the outstanding shares of Subsidiary Company for P800,000. On the date of acquisition, Subsidiary Company reported Ordinary Shares of P800,000 and Retained Earnings of P200,000. Subsidiary’s Inventory was understated by P20,000; Equipment with a 5-year life was understated by P20,000, Building with an 8-year life was understated by P80,000 and land was understated by P40,000. The non-controlling interest is to be stated at fair value and the fair value of the non-controlling interest on January 1, 20x8 is P210,000. During the year, Parent sold goods to Subsidiary for P150,000 at a 25% mark-up and in turn purchased P200,000 of Subsidiary’s goods which Subsidiary sold at a 20% mark-up. From the goods purchased, P50,000 remain in Parent’s books at the end of the year, while P20,000 remain in Subsidiary’s books at the end of the year. 30% of the undervalued inventory of Subsidiary still remain unsold by the end of 20x8. The following are…
On January 1, 20x8,Parent Company purchased 80% of the outstanding shares of Subsidiary Company for P800,000. On the date of acquisition, Subsidiary Company reported Ordinary Shares of P800,000 and Retained Earnings of P200,000. Subsidiary’s Inventory was understated by P20,000; Equipment with a 5-year life was understated by P20,000, Building with an 8-year life was understated by P80,000 and land was understated by P40,000. The non-controlling interest is to be stated at fair value and the fair value of the non-controlling interest on January 1, 20x8 is P210,000. The following are taken from the books of Parent and Subsidiary for 20x8: Determine the Non-Controlling Interest as of December 31, 20x8. Your answer
On January 1, 20x8,Parent Company purchased 80% of the outstanding shares of Subsidiary Company for P800,000. On the date of acquisition, Subsidiary Company reported Ordinary Shares of P800,000 and Retained Earnings of P200,000. Subsidiary’s Inventory was understated by P20,000; Equipment with a 5-year life was understated by P20,000, Building with an 8-year life was understated by P80,000 and land was understated by P40,000. The non-controlling interest is to be stated at fair value and the fair value of the non-controlling interest on January 1, 20x8 is P210,000. The following are taken from the books of Parent and Subsidiary for 20x8. 1. Determine the Non-Controlling Interest as of December 31, 20x8. 2.
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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
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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? .....
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