On January 1,2020, ABC Company acquired 80 percent of DEF Company's Common Stock for P400,000 cash. At that date, DEF reported common stock outstanding of P300,000 and retained earnings of P 75,000, and the fair value of non-controlling interest was P80,000. The book values and fair values of DEF's assets and liabilities were equal, except for 2 items. The first item is building which had a fair value of P50,000 lower than book value and an 5-year remaining life and Inventory that is undervalued by P50,000. The inventory was sold during 2020. DEF reported the following data for 2020 and 2021 Comprehensive Income P 600,000 Dividends Paid P 10,000 Year Net Income 2020 P 500,000 2021 700,000 800,000 20,000 ABC reported net income (Including dividend income from investment in DEF ) of P1,000,000 and paid dividends of P500,000 for both the years 1. How much is the goodwill/gain on bargain purchase ? 2. What is the amount of consolidated net income reported for 2020 ? 3. Using the same information, what is the amount of comprehensive income attributable to controlling interest for 2020 ? 4. What is the amount of consolidated net income reported for 2021 ? 5. Using the same information, what is the amount of comprehensive income attributable to controlling interest for 2021 ?
On January 1,2020, ABC Company acquired 80 percent of DEF Company's Common Stock for P400,000 cash. At that date, DEF reported common stock outstanding of P300,000 and retained earnings of P 75,000, and the fair value of non-controlling interest was P80,000. The book values and fair values of DEF's assets and liabilities were equal, except for 2 items. The first item is building which had a fair value of P50,000 lower than book value and an 5-year remaining life and Inventory that is undervalued by P50,000. The inventory was sold during 2020. DEF reported the following data for 2020 and 2021 Comprehensive Income P 600,000 Dividends Paid P 10,000 Year Net Income 2020 P 500,000 2021 700,000 800,000 20,000 ABC reported net income (Including dividend income from investment in DEF ) of P1,000,000 and paid dividends of P500,000 for both the years 1. How much is the goodwill/gain on bargain purchase ? 2. What is the amount of consolidated net income reported for 2020 ? 3. Using the same information, what is the amount of comprehensive income attributable to controlling interest for 2020 ? 4. What is the amount of consolidated net income reported for 2021 ? 5. Using the same information, what is the amount of comprehensive income attributable to controlling interest for 2021 ?
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
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8MC
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Transcribed Image Text:On January 1,2020, ABC Company acquired 80 percent of DEF Company's Common Stock for P400,000
cash. At that date, DEF reported common stock outstanding of P300,000 and retained earnings of P
75,000, and the fair value of non-controlling interest was P80,000. The book values and fair values of
DEF's assets and liabilities were equal, except for 2 items. The first item is building which had a fair value
of P50,000 lower than book value and an 5-year remaining life and Inventory that is undervalued by
P50,000. The inventory was sold during 2020. DEF reported the following data for 2020 and 2021
Comprehensive Income Dividends Paid
P 600,000
800,000
Year
Net Income
2020
P 10,000
P 500,000
700,000
2021
20,000
ABC reported net income (Including dividend income from investment in DEF ) of P1,000,000 and paid
dividends of P500,000 for both the years
1. How much is the goodwill / gain on bargain purchase ?
2. What is the amount of consolidated net income reported for 2020 ?
3. Using the same information, what is the amount of comprehensive income attributable to
controlling interest for 2020 ?
4. What is the amount of consolidated net income reported for 2021 ?
5. Using the same information, what is the amount of comprehensive income attributable to
controlling interest for 2021?
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