Answered: On January 1, BB Acquired 60 percent of…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.4.9P: Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of...

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On January 1, BB Acquired 60 percent of the outstanding voting stock of SS for P260,000 cash consideration. The remaining 40 percent of SS had an acquisition date fair value of P65,000. On January 1, SS possessed equipment (5-year life) that was undervalued on its books P25,000. SS also had developed several secret formulas that BB assessed at P50,000. Theses formulas, although not recorded on SS's financial records, were estimated to have a 20-year future life. BB also determined that the inventory of SS is overvalued by P10,000. 80% of these inventories remain unsold by the end of the year. As of December 31, the financial statements appeared as follows:

1) From the data below, determine the net income/(net loss) attributable to the non-controlling interest.

2) From the data below, determine the consolidated assets as of December 31 and the consolidated expenses to be reported for the year.

3) From the data below, determine the net income/(net loss) attributable to the parent.

BB
S
Revenues (from sales and dividends)
Cost of goods sold
Expenses
P (300, 000)
140, 000
20, 000
Р 200, 000)
80, 000
10, 000
P (140, 000)
P (110, 000)
Net Income
Retained earnings 1/1
Net Income
P (300, 000)
(140, 000)
P (150, 000)
(110, 000)
10,000
Р (250, 000)
Dividends paid
Retained earnings 12/31
-0-
P (440, 000)
P 210, 000
P90, 000
110, 000
Cash and Receivables
Inventory
Investment in SS
150, 000
260, 000
-0-
300, 000
P500, 000
Equipment (net)
440, 000
Total Assets
P 1,060, 000
P (420, 000)
(200, 000)
(440, 000)
P (1,060,000)
Р (150, 000)
(100, 000)
(250, 000)
P (500, 000)
Liabilities
Common stock
Retained earnings 12/31
Total Liabilities and Equities

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