The Ludel Company acquired the net assets of the Girl Conrad Company on January 1, 2018, and made the following entry to record the purchases: Current assets P100,000 Equipment 150,000 Land 50,000 Buildings 300,000 Goodwill 100,000 Liabilities 80,000 Common stock, P1 par 100,000 Paid-in capital in excess of par 520,000 1. Assuming that additional shares on January 1, 2020 would be issued on that date to compensate for any fall in the value of Ludel common stock below P16 per share. The settlement would be to cure the deficiency by issuing added shares based on their fair value on January 1, 2020. The fair price of the shares on January 1, 2020 was P10. What is the additional number of shares issued on January 1, 2020 to compensate for any fall in the value of the stock? a. 60,000 b. 100,000 c. 10,000 d. 160,000
The Ludel Company acquired the net assets of the Girl Conrad Company on January 1,
2018, and made the following entry to record the purchases:
Current assets P100,000
Equipment 150,000
Land 50,000
Buildings 300,000
Liabilities 80,000
Common stock, P1 par 100,000
Paid-in capital in excess of par 520,000
1. Assuming that additional shares on January 1, 2020 would be issued on that date to
compensate for any fall in the value of Ludel common stock below P16 per share. The
settlement would be to cure the deficiency by issuing added shares based on their fair
value on January 1, 2020. The fair price of the shares on January 1, 2020 was P10.
What is the additional number of shares issued on January 1, 2020 to compensate for any
fall in the value of the stock?
a. 60,000
b. 100,000
c. 10,000
d. 160,000
2. The Jonnie Company owns 75% of the Junior Company. On December 31, 2020, the last
day of the accounting period, Junior sold to Jonnie a non-current asset for P200,000. The
asset originally cost P500,000 and at the end of the reporting period its carrying amount in
Junior’s books was P160,000. The group’s consolidated
been drafted without any adjustments in relation to this non-current asset. What
adjustments should be made to the consolidated statement of financial position figures for
a. Retained earnings (Reduce by P30,000); Non-controlling interest (Reduce by
P10,000)
b. Retained earnings (Increase by P300,000); Non-controlling interest (No change)
c. Retained earnings (Reduce by P40,000); Non-controlling interest (No change)
d. Retained earnings (Increase by P225,000); Non-controlling interest (Increase by
P75,000)
3. Baste Company owns an 80% controlling interest in the Bastion Company. Bastion regularly
sells merchandise to Baste, which then sold to outside parties. The gross profit on all such
sales is 40%. On January 1, 2019, Baste sold land and a building to Bastion. The value of the
parcel is 20% to land and 80% to structures. The data are the following:
Baste Bastion
Internally generated net income, 2019 P1,560,000 P750,000
Internally generated net income, 2020 10,320,000 705,000
Intercompany merchandise sales, 2019 300,000
Intercompany merchandise sales, 2020 360,000
Intercompany inventory, December 31, 2019 45,000
Intercompany inventory, December 31, 2020 60,000
Cost of real estate sold on January 1, 2019 1,800,000
Sales price of real estate on January 1, 2019 2,400,000
For 2019, what is the consolidated comprehensive income attributable to controlling
interest?
a. 1,575,000
b. 1,597,500
c. 1,569,600
d. 1,875,000
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