11 and 12 pls CHAPTER 3: CONSOLIDATION SUBSEQUENT ToDATE OF ACQUISI TION20TTI2IUOPage | 12411. YSL Corporation acquired 80% of the outstanding ordinary shares of GBX Company onJune 1, 2020 for P586,250. GBX Company's shareholder's equity components at the endof this year were as follows: Ordinary shares, P100 par, P250,000; Share premium.P112,500 and Retained earnings, P222,5000.Non-controlling interest (NCI) is measured at fair value. All the assets of GBX were fairlyvalued, except for inventories, which is overstated by P11,000 and equipment, which isunderstated by P15,000. Remainming useful life of equipment is 4 years. Both companiesuse straight line method for depreciation and amortization. Shareholder's equity of YSLon January 1, 2020 is composed of Ordinary shares, P750,000; Share premium, P175,000and Retained earnings, P525,000.Fair value of NCI on the date of acquisition is P117,500. Goodwill, if any, should bewritten down by P14,225 at year end. Net income for the first year of parent and subsidiaryare P75,000 and P42,500 (from date of acquisition), respectively. Dividends declared atthe end of the year amounted to P20,000 and P15,000. There was no issuance of newshares during the year.What is the amount of non-controlling interest in net assets of GBX Company as ofDecember 31, 2020?a. P145,167.50Ob. P127,242.50c. P121,917.50d. P124,242.5012. Refer to #11, what is the amount of consolidated equity at the end of the year?a. P1,520,345.50b. P1,644,587.50c. P1,462,262.50d. P1,624,262.50

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Cornerstones of Financial Accounting

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Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

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Problem 24E

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PROBLEM V. On January 2, 2020, P Company acquired 80% interest in S Company for P4,125,000 cash. On this date, the outstanding ordinary share capital and accumulated profits of P Company and S Company are as follows: P Company S Company Ordinary share capital P2,250,000 P1,312,000 Share premium 1,500,000 Accumulated profits (losses) 5,250,000 3,187,500 There was no issuance of ordinary shares during the year. Noncontrolling interest is initially measured at fair value. Fair value of the following assets of S Company exceeded their book values as follows: Inventories, P210,000; Property and equipment (remaining useful life 10 years), P127,500. All other assets and liabilities are fairly valued. Goodwill if any is not impaired. On December 31, 2020, the two companies reported the following operating results: P Company S Company Net income P1,785,000 P975,000 Dividends paid 525,000 262,500 1. Compute for the consolidated shareholders' equity.
PROBLEM IV. On January 2, 2019, Klaus Company (qualified as SME) acquired 80% interest in Marcel Company for P4,125,000 cash. On this date, the outstanding ordinary share capital and accumulated profits of Klaus Company and Marcel Company are as follows: Klaus Marcel Ordinary share capital P 2,250,000 P 1,312,000 Share premium 1,750,000 Accumulated profits (losses) 5,520,000 3,187,500 There was no issuance of ordinary shares during the year. Fair value of the following assets of Marcel exceeded their book values as follows: Inventories, P210,000; Property and equipment (useful life, 10 years), P127,500. All other assets and liabilities are fairly valued. On December 31, 2019, the two companies reported the following operating results: Klaus Marcel Net income P 1,825,000 P 975,000 Dividends paid 525,000 262,500 1. Consolidated shareholders' equity reported in the consolidated statement of financial position on 12/31/19
ON of consolidated shareholder's equity? a. P9,853,575 b. P9,122,070 c. P8,773,575 d. P9,867,525 19. On January 5, 2022, Purpose Corporation purchased 70% of Showtime Company's P10 par ordinary shares for P900,000. On this date, the carrying amount of Showtime's net assets was P1,000,000. The fair.value of identifiable net assets and liabilities of Showtime were the same as the carrying amount except for equipment, which is 200,000 in excess of carrying amount. For the year ended December 31, 2022, Showtime had a net income of P150,000 and paid cash dividend of P63,000 to Purpose. Excess attributable to equipment is amortized over 10 years. In December 31, 2022 consolidated statements, the non-controlling interest should be reported at: a. P397,714 b. Р380,614 P372,000 с. d. P345,500 20 On January 2, 2022, Galatians Company acquired 80% investment in
QUESTION On December 31, 2020, P Company purchased a controlling interest in S. Company for $1.060,000. The consolidated balance sheet on December 31, 2020 reported noncontrolling interest in S Company of $265,000. On the date of acquisition, the stockholders' equity section of S Company's balance sheet was as follows: Common stock Other contributed capital Retained earnings Total Noncontrolling Interest Percentage is: $520,000 $380,000 Required: 1. Compute the noncontrolling interest percentage on December 31, 2020. Otsek S $280,000 $1,180,000 2. Prepare the investment elimination entry made to prepare a consolidated balance sheet workpaper. Any difference between book value and the value implied by the purchase price relates to subsidiary PP&E. Debit Credit 7 points
4. A Co. acquired 60% of the outstanding ordinary shares of B Co. on January 2, 2022. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Statements of Comprehensive Income of A Co. & B Co. for 2022 are as follows: А Со. P218,750 131,250 P87,500 26,250 P61,250 В Со. P87,500 52,500 P35,000 13,125 P21,875 - 0 - P21,875 Net Sales Cost of Sales Gross Profit Operating Expenses Operating Income Dividend Revenue 14,000 P75,250 Net Income B Co. made sales to A Co. of P28,000 in 2021 and P42,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P17,500 of which 20% comes from B Co. and inventory on December 31,2022 amounting to P21,000 of which 30% comes B Co. A Co. uses 30% mark-up on cost and B Co. uses 25% mark-up on cost for their selling prices. A Co. & B Co. declared and paid dividends in 2022 amounting to P21,000 and P17,500, respectively. On January 1, 2022, B Co. has ordinary shares of P80,000; Share Premium of P30,000 and…
On January 3, 2022, P Company acquired 70% interest in S Company for P4,200,000. Considerationincludes issuance of shares with fair value of P3,500,000 and cash for the balance. On this date, the equityof S Company is as follows: P. Company S CompanyOrdinary Share Capital 3,300,000 1,450,000Accumulated Profits 5,450,000 2,800,000Non-controlling interest is initially measured at fair value of P1,675,000. Fair value of the following assetsof S Company exceeded their book values: Inventories, P150,000; Fixed assets (remaining life – 5 years),P600,000. All other assets and liabilities are fairly valued.S Company sold an equipment to P Company for P200,000 carried in S’s book at P120,000 on July 1, 2022;remaining life is 4 years. Towards the end of the year, P sold to S merchandise costing P150,000 at 40%gross profit, 25% of these inventories was unsold as of balance sheet date. Also, P purchased inventoryfrom S…
PROBLEM V. YSL Corporation, SME, acquired 80% of the outstanding ordinary shares of GBX Company on June 1, 2019 for P586,250. GBX Company's shareholder's equity components at the end of this year were as follows: Ordinary shares, P100 par, P250,000; Share premium, P112,500 and Retained earnings, P222,500. All the assets of GBX were fairly valued, except for inventories, which is overstated by P11,000 and equipment, which is understated by P15,000. Remaining useful life of equipment is 4 years. Shareholder's equity of YSL on January 1, 2019 is composed of Ordinary shares, P750,000; Share premium, P175,000 and Retained earnings, P525,000. Net income for the first year of parent and subsidiary are P75,000 and P42,500 (from date of acquisition), respectively. Dividends declared at the end of the year amounted to P20,000 and P15,000, respectively. There was no issuance of new shares during the year. 1. What is the amount of non-controlling interest in net assets of GBX Company as of…
On January 3, 2022, P Company acquired 70% interest in S Company for P4,200,000. Considerationincludes issuance of shares with fair value of P3,500,000 and cash for the balance. On this date, the equityof S Company is as follows:P. Company S CompanyOrdinary Share Capital 3,300,000 1,450,000Accumulated Profits 5,450,000 2,800,000Non-controlling interest is initially measured at fair value of P1,675,000. Fair value of the following assetsof S Company exceeded their book values: Inventories, P150,000; Fixed assets (remaining life – 5 years),P600,000. All other assets and liabilities are fairly valued.S Company sold an equipment to P Company for P200,000 carried in S’s book at P120,000 on July 1, 2022;remaining life is 4 years. Towards the end of the year, P sold to S merchandise costing P150,000 at 40%gross profit, 25% of these inventories was unsold as of balance sheet date. Also, P purchased inventoryfrom S amounting to P250,000 which includes mark-up of 20% based on cost. P sold to…
00 25ilideiJ IstoT 13. The working paper elimination (in journal entry format) on August 31, 2022, for the consolidation as of date of acquisition of P Corporation and subsidiary is shown below. On that date, P acquired 88% of the outstanding ordinary shares of S Company for cash. Ordinary share - S le Share premium - S Retained earnings- S to 29uisy 60,000 35,250 20,100 3,432 5,080 3,960 000.099d Inventories- S Plant assets (net)- Sblorbo1e oni ni sa noilanida 000,009 000 Patents- S Goodwill 55,280 Investment in S Company 165,660 17,442 Non-Controlling Interest P Company opt measure NCI such that the resulting goodwill is attributable both to controlling and non-controlling interest. idmoo How much is the control premium included in the purchase price? a. P8,682 b. P37,752 с. Р20,310 d. P49,380 de 14. The goodwill attributable to non-controlling interest is: P2,103 b. P6,634 c. P2,093 d. P4,530 а. 000:009
PROBLEM III. FNE Company (classified as SME) acquired 4,000 shares of the outstanding stock of HCYSYLM Company for P1,200,000 on January 1, 2019. FNE Company also paid P100,000 direct costs related to the combination. On this date, the stockholders' equity of HCYSYLM Company consisted of Capital Stock of P500,000 P100 par and Retained Earnings of P600,000. The carrying values of HCYSYLM Company's identifiable assets and liabilities are equal to their fair market values. At the end of the year, FNE Company reported net income of P300,000 and paid dividends of P250,000 while HCYSYLM Company reported net income of P200,000 and paid dividends of P10 per share. 1. The consolidated net income on December 31, 2019 is 2. The amount of Goodwill in the consolidated balance sheet is 3. The non-controlling interest in December 31, 2019 presented in the shareholders' equity of FNE is
On January 3, 2022, P Company acquired 70% interest in S Company for P4,200,000. Consideration includes issuance of shares with fair value of P3,500,000 and cash for the balance. On this date, the equity of P and S Company are as follows: P Company S Company Ordinary Share Capital 3,300,000 1,450,000 Accumulated Profits 5,450,000 2,800,000 Non-controlling interest is initially measured at fair value of P1,675,000. Fair value of the following assets of S Company exceeded their book values: Inventories, P150,000; Fixed assets (remaining life – 5 years), P600,000. All other assets and liabilities are fairly valued. Towards the end of the year, P sold to S merchandise costing P150,000 at 40% gross profit, 25% of these inventories was unsold as of balance sheet date. Also, P purchased inventory from S amounting to P250,000 which includes mark-up of 20% based on cost. P sold to outsider 30% of these inventories during 2022. Goodwill is impaired by P225,000. P…
On January 3, 2022, P Company acquired 70% interest in S Company for P4,200,000. Consideration includes issuance of shares with fair value of P3,500,000 and cash for the balance. On this date, the equity of P and S Company are as follows: P Company S Company Ordinary Share Capital 3,300,000 1,450,000 Accumulated Profits 5,450,000 2,800,000 Non-controlling interest is initially measured at fair value of P1,675,000. Fair value of the following assets of S Company exceeded their book values: Inventories, P150,000; Fixed assets (remaining life – 5 years), P600,000. All other assets and liabilities are fairly valued. Towards the end of the year, P sold to S merchandise costing P150,000 at 40% gross profit, 25% of these inventories was unsold as of balance sheet date. Also, P purchased inventory from S amounting to P250,000 which includes mark-up of 20% based on cost. P sold to outsider 30% of these inventories during 2022. Goodwill is impaired by P225,000. P…

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