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On January 1, ABC Acquired 60 percent of the outstanding voting stock of XYZ for P301,500 cash consideration. The remaining 40 percent of XYZ had an acquisition date fair value of P138,500. On January 1, XYZ possessed equipment (5-year life) that was undervalued on its books P25,000. XYZ also had developed several secret formulas that ABC assessed at P50,000. Theses formulas, although not recorded on XYZ's financial records, were estimated to have a 20-year future life. ABC also determined that the inventory of XYZ is overvalued by P10,000. 80% of these inventories remain unsold by the end of the year. As an independent case, assume that the goodwill is impaired by P5,000 by December 31, determine the net income/(net loss) attributable to the controlling interest.

On January 1, ABC Acquired 60 percent of the outstanding voting stock of XYZ for P301,500 cash consideration. The remaining 40 percent of XYZ had an acquisition date fair value of P138,500. On January 1, XYZ possessed equipment (5-year life) that was undervalued on its books P25,000. XYZ also had developed several secret formulas that ABC assessed at P50,000. Theses formulas, although not recorded on XYZ's financial records, were estimated to have a 20-year future life. ABC also determined that the inventory of XYZ is overvalued by P10,000. 80% of these inventories remain unsold by the end of the year. As an independent case, assume that the goodwill is impaired by P5,000 by December 31, determine the net income/(net loss) attributable to the controlling interest.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 2MC: The following information is available for Cooke Company for the current year: The gross margin is...
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7. On January 1, ABC Acquired 60 percent of the outstanding voting stock of XYZ for P301,500 cash consideration. The remaining 40 percent of XYZ had an acquisition date fair value of P138,500. On January 1, XYZ possessed equipment (5-year life) that was undervalued on its books P25,000. XYZ also had developed several secret formulas that ABC assessed at P50,000. Theses formulas, although not recorded on XYZ's financial records, were estimated to have a 20-year future life. ABC also determined that the inventory of XYZ is overvalued by P10,000. 80% of these inventories remain unsold by the end of the year. As an independent case, assume that the goodwill is impaired by P5,000 by December 31, determine the net income/(net loss) attributable to the controlling interest.

As of December 31, the financial statements appeared as follows:

АВС XYZ P (300, 000) P (200, 000) Revenues (from sales and dividends) Cost of goods sold Expenses 80, 000 10, 000 P (110, 000) 140, 000 20,000 P (140, 000) Net Income Retained eamings 1/1 P (300, 000) (140, 000) P (150, 000) (110, 000) 10,000 P (250, 000) Net Income Dividends paid Retained eamings 12/31 -0- P (440, 000) P 210, 000 150, 000 301,500 398,500 Р 1,060, 000 P90, 000 110, 000 Cash and Receivables Inventory Investment in SS -0- Equipment (net) Total Assets 300, 000 P500, 000 P (420, 000) (200, 000) (440, 000) P (1,060,000) P (150, 000) (100, 000) (250, 000) P (500, 000) Liabilities Common stock Retained earmings 12/31 Total Liabilities and Equities
Transcribed Image Text:АВС XYZ P (300, 000) P (200, 000) Revenues (from sales and dividends) Cost of goods sold Expenses 80, 000 10, 000 P (110, 000) 140, 000 20,000 P (140, 000) Net Income Retained eamings 1/1 P (300, 000) (140, 000) P (150, 000) (110, 000) 10,000 P (250, 000) Net Income Dividends paid Retained eamings 12/31 -0- P (440, 000) P 210, 000 150, 000 301,500 398,500 Р 1,060, 000 P90, 000 110, 000 Cash and Receivables Inventory Investment in SS -0- Equipment (net) Total Assets 300, 000 P500, 000 P (420, 000) (200, 000) (440, 000) P (1,060,000) P (150, 000) (100, 000) (250, 000) P (500, 000) Liabilities Common stock Retained earmings 12/31 Total Liabilities and Equities
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