Parent Company acquired 75% of outstanding ordinary shares of Subsidiary Company for P900,000. Book value of Subsidiary Company's net assets is P1,000,000. Upon re-measurement of acquires net assets, it shows that inventory has a fair value lower by P40,000 than its book value and equipment held for 3 years has a fair value and book value of P450,000 and P360,000, respectively. The original cost of Subsidiary Company's equipment is P576,000 with no residual value. Parent opts to measure NCI at fair value of P275,000. During the year Parent reported net income of P300,000 and received P30,000 dividend from Subsidiary. Subsidiary Company's net income amounts to P100,000. Goodwill impairment attributabl to the controlling interest is P13,500. (INPUT YOUR ANSWERS IN FIGURES. DO NOT PUT ANY COMMA, PESO SIGN, DECIMALS, AND EXTRA SPACES) 1. Non-Controlling Interest in Net Assets of Subsidiary at the end is: 2. Net income attributable to Parent Company is:

Parent Company acquired 75% of outstanding ordinary shares of Subsidiary Company for P900,000. Book value of Subsidiary Company's net assets is P1,000,000. Upon re-measurement of acquires net assets, it shows that inventory has a fair value lower by P40,000 than its book value and equipment held for 3 years has a fair value and book value of P450,000 and P360,000, respectively. The original cost of Subsidiary Company's equipment is P576,000 with no residual value. Parent opts to measure NCI at fair value of P275,000. During the year Parent reported net income of P300,000 and received P30,000 dividend from Subsidiary. Subsidiary Company's net income amounts to P100,000. Goodwill impairment attributabl to the controlling interest is P13,500. (INPUT YOUR ANSWERS IN FIGURES. DO NOT PUT ANY COMMA, PESO SIGN, DECIMALS, AND EXTRA SPACES) 1. Non-Controlling Interest in Net Assets of Subsidiary at the end is: 2. Net income attributable to Parent Company is:

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 19E

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At the beginning of the year, Parent Co. acquired 70% interest in Subsidiary Co. On acquisition date, Subsidiary’s identifiable assets approximated their fair values except for an inventory whose fair value exceeded its carrying amount by P10,000 and a building whose fair value exceeded its carrying amount by P80,000. The building has a remaining useful life of 5 years. At the end of the year, Parent Co. and Subsidiary Co. reported profits of P400,000 and P80,000, respectively. No dividends were declared by either entity during year. There were also no inter-company transactions and impairment in goodwill. How much is the consolidated profit attributable to owners of the parent?
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.
Parent Company acquired 80% of the outstanding shares of Subsidiary Company for 4,500,000 on January 2, 2020 and paid P50,000 for direct acquisition related costs. On this date, Subsidiary Company’s stockholders’ equity was composed of: Share Capital – P2,000,000; Share Premium – P1,200,000 and Retained Earnings – P1,600,000. The excess of cost over book value was allocated as follows: 10% to undervalued inventory, 40% to over depreciated fixed assets which has a remaining life of 5 years and the remainder to goodwill. Subsidiary reported net income of P200,000 and paid dividends of P150,000 in 2020. The impairment on goodwill for 2020 was reported to be P5,000. The NCI in the consolidated balance sheet on December 31, 2020 is?
At the beginning of the current year, Occidental Company purchased 40% of the outstanding ordinary shares of Manapla Company for ₱3,500,000 when the net assets of Manapla amounted to ₱7,000,000. At acquisition date, the carrying amount of the identifiable assets and liabilities of Manapla were equal to their fair value, except for equipment for which the fair value was ₱1,500,000 greater than carrying amount and inventory whose fair value was ₱500,000 greater than cost. The equipment has a remaining life of 4 years and the inventory was all sold during the current year. Manapla Company reported net income of ₱4,000,000 and paid no dividends during the year. What is the maximum amount of the “equity in earnings of the investee”. a. 1,350,000b. 1,250,000c. 1,600,000d. 1,700,000 What is the solution for the option A?
Accountancy Company acquired 75% of the outstanding shares of Finance Company for P900,000. Book value of Finance Company’s net assets is P1,000,000. Upon re-measurement of the acquiree’s net assets, it shows that inventory is overstated by P40,000 and an equipment held for 3 years has a fair value and book value of P420,000 and P360,000, respectively. The original cost of the equipment if P576,000 with no residual value. The NCI was measured at its fair value of P275,000. During the year, Accountancy reported net income from separate operation of P350,000 and received P42,000 dividend from Finance Company. The net income of Finance Company is reported at P135,000. Goodwill impairment attributable to the controlling interest is P13,500. Compute the consolidated net income attributable to the parent.
Accountancy Company acquired 75% of the outstanding shares of Finance Company for P900,000. Book value of Finance Company’s net assets is P1,000,000. Upon re-measurement of the acquiree’s net assets, it shows that inventory is overstated by P40,000 and an equipment held for 3 years has a fair value and book value of P420,000 and P360,000, respectively. The original cost of the equipment if P576,000 with no residual value. The NCI was measured at its fair value of P275,000. During the year, Accountancy reported net income from separate operation of P350,000 and received P42,000 dividend from Finance Company. The net income of Finance Company is reported at P135,000. Goodwill impairment attributable to the controlling interest is P13,500.A. Compute the consolidated net income attributable to the parent. B. Determine the balance of Non-Controlling Interest – Net Assets Subsidiary (NCINAS).
Accountancy Company acquired 75% of the outstanding shares of Finance Company for P900,000. Book value of Finance Company's net assets is P1,000,000. Upon re-measurement of the acquiree's net assets, it shows that inventory is overstated by P40,000 and an equipment held for 3 years has a fair value and book value of P420,000 and P360,000, respectively. The original cost of the equipment if P576,000 with no residual value. The NCI was measured at its fair value of P275,000. During the year, Accountancy reported net income from separate operation of P350,000 and received P42,000 dividend from Finance Company. The net income of Finance Company is reported at P135,000. Goodwill impairment attributable to the controlling interest is P13,500. 1. Compute the consolidated net income attributable to the parent. 2. Determine the balance of Non-controlling Interest - Net Assets Subsidiary (NCINAS)
Parent Corporation acquired 80% of the outstanding voting stock of Sub Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, Sub Company's stockholders' equity is composed of: Share capital- P2,000,000 Share premium- 1,200,000 Retained earnings- 1,600,000 The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. 1. How much is the fair value of the net assets of Sub Company? 2. How much is the goodwill at the date of acquisition?
On January 2, 2022, Parent Company acquired 80% of Subsidiary Company’s ordinary shares for P700,000. The book value and fair value of the net assets were equal except for inventory which was overstated by P37,500 and equipment which was undervalued by P50,000. The equipment has a remaining useful life of ten years. Non-controlling interest is measured at fair value. On the date of acquisition, stockholders’ equity section of the two companies were as follows (see image below).During the year, Parent sold merchandise to Subsidiary costing P500,000 for P625,000. Only 75% was sold during the year. On December 31, 2022, Subsidiary Company reported net income of P131,250 and paid dividends of P45,000 to Parent. Parent reported earnings from its own operations of P356,250 and paid dividends of P172,500. Goodwill had been impaired and should be reported at P30,000 on December 31, 2022. Subquestions: a. How much is the Net Income Attributable to NCI? b. How much is the Non-Controlling…
Parent Corporation acquired 80% of the outstanding voting stock of Sub Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, Sub Company’s stockholders’ equity is composed of:Share capital- P2,000,000Share premium- 1,200,000Retained earnings- 1,600,000The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. How much is the fair value of the net assets of Sub Company? A. 4,800,000 B. 5,212,500 C. 4,362,500 D. 5,237,500
Parent Corporation acquired 80% of the outstanding voting stock of Sub Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, Sub Company’s stockholders’ equity is composed of:Share capital- P2,000,000Share premium- 1,200,000Retained earnings- 1,600,000The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. how much is the goodwill at the date of acquisition? 412,500 875,000 825,000 437,500
Mama company acquired 75% of the outstanding shares of Finance Company for P900,000. Book value of Papa Company’s net assets is P1,000,000. Upon re-measurement of the acquiree’s net assets, it shows that inventory is overstated by P40,000 and an equipment held for 3 years has a fair value and book value of P420,000 and P360,000, respectively. The original cost of the equipment if P576,000 with no residual value. The NCI was measured at its fair value of P275,000. During the year, Mama reported net income from separate operation of P350,000 and received P42,000 dividend from Papa Company. The net income of Papa Company is reported at P135,000. Goodwill impairment attributable to the controlling interest is P13,500. Compute the consolidated net income attributable to the parent and Non-Controlling Interest – Net Assets Subsidiary