On December 31, 2011, the APA Company purchased some of the outstanding stocks of
JPA Company by paying the following: P 920,000 cash; and 5,000 P10-par-value shares
with a market value of P20 per share. Book value and fair value data on the Statement
of Financial Position on December 31, 2011, are as follows:
APA Company
JPA Company
Book Value
Fair Value
Book Value
Fair Value
Cash
P 2, 300,000
P2,300,000
P 150,000
P 150,000
Accounts Receivable
200,000
200,000
140,000
140,000
Land
300,000
300,000
350,000
300,000
Inventory
750,000
650,000
255,000
300,000
Building,net
500,000
400,000
300,000
152,000
Equipment,net
400,000
330,000
260,000
380,000
TOTAL ASSETS
P 4,450,000
P 1,455,000
Liabilities
P 500,000
Capital Stock
800,000
Additional paid in capital
450,000
Retained Earnings
2,700,000
TOTAL LIAB & SHE
P 4,450,000
P 500,000
P
285,000
300,000
480,000
390,000
P 1,455,000
P 285,000
APA incurred and paid legal and brokerage fees of P12,800 for business
combination; P6,000 indirect acquisition costs; and P15,000 share issuance costs.
The FV of NCI is P 340,000.
The remaining life of building and equipment is 5 and 10 years, respectively
for both companies. For both companies, building and equipment are presented in net
amounts (50% depreciated). JPA Company sold its building to APA Company on June 30,
2012 at a loss of P10,000. The same building was sold by APA Company to ABC Company
on December 31, 2014 at a gain of P5,000. On December 31, 2013, JPA Company decided
to sold his equipment to AXE Company at a profit of P15,000. In September 30, 2014,
APA Company sold its Equipment to JPA Company at a loss of P10,000.
Above inventories of JPA Company (with mark-up of 20% based on cost)
sold as follows:
2012
40%
2013
2014
40%
20%
Sold to APA Company and the same was sold by APA Company
to ABC Company in 2014
Sold to XYZ Company
Sold to APA Company and the same was sold by APA Company
to DDD Company in 2015
Above inventories of APA Company (with mark-up of 20% based on cost)
sold as follows:
2012
2013
20%
20%
2014
20%
2015
10%
2016
2017
15%
15%
were
were
Sold to CCC Company
Sold to JPA Company and the same was sold by JPA Company
to DDD Company in 2014
Sold to JPA Company and the same was sold by JPA Company
to FFF Company in 2014
Sold to JPA Company and the same was sold by JPA to DDD
Company in 2016
Sold to CCC Company
Sold to CCC Company
In 2015, the goodwill is tested for impairment and it was found to be 70%
impaired.
2012: Net income
Dividend
2013: Net income
APA (in pesos)
JPA (in pesos)
(150,000)
40,000
20,000
10,000
30,000
(20,000)
Dividend
2014: Net Income
Dividend
2015: Net Income
Dividend
20,000
None
50,000
30,000
-
10,000
40,000
20,000
20,000
10,000
ASSUMED: 75% ownership; NCI is measured at FV.
REQUIRED: COMPLETE THE TABLE
12/31/2011
Goodwill or Gain on Acquisition
Net Amount of Amortization based on
schedule
NCI in CI JPA
APA Share in prior years adjusted
and undistributed increase in JPA-RE
NCI
Conso. Income
Conso. RE
Conso. Building (net)
Conso. Equipment (net)
Conso. Depreciation- E
2013
2014
2
3
4
5
8
6
11
16
21
26
29
32
2012
1
12
17
22
27
30
33
13
18
23
28
31
34
2015
9
7
10
14
19
24
15
20
25