6.) Puzon Inc.
There is no recognized impairment of goodwill.
7.) Pecson Inc.
Excess above book value = P 60,000
Amortization period = 10 Years
consolidated CI = Excess above book value
Amortization period
consolidated CI = 60,000/10years
= P6,000 decrease in consolidated CI
Since Person, Inc. is paying a premium upon purchase, the excess or the premium will
most likely increase its CI in the next years.
8.) ZERO -0The CI of NCI is zero since the subsidiary is a wholly-owned subsidiary of the acquirer.
This means 100% ownership belongs to the acquirer. No other entity has ownership of
the subsidiary. Thus, the income attributable to the Non-controlling interest is zero.
9.) Puno Corporation
Net Income
Less: Dividend from Sales (40,000 x 90%)
Net Income from own operation
Sales Net Income
Consolidated Net Income
P145,000
(36,000)
109,000
120,000
P229,000
10.) Sy Company
Net Income
Amortization
Adjusted Net
Income
P300,000
(60,000)
P240,000
P240,000*10% P24,000
11.) Palawan Inc.
Amount of Goodwill to be reported as follows :
Purchase Amount
P1,700,000
Less: Fair value of Net Assets (1300000)
Goodwill
P400,000
12.) Presto Corporation
Jan 1 - Mar 21, 2013
Revenue
95,000
Expenses
(72,000)
Net Income, prior 23,000
Net Income, 2013
Net Income, prior
Net Income, after
acquisition
% owned
Net Income attributed to
Parent
Net Income, Parent
Consolidated Net Income
P80,000
(23,000)
57,000
x 90%
51,300
140,000
P191,300
13.) Precy Inc.
Acquisition cost
Less: Book value of interest acquired
Allocated to building
Consolidated retained earnings:
Retained earnings, Jan. 1 - Pepe
P700,000
630,000
P 70,000
P550,000
Consolidated net income attributable to parent:
Net income - Precy
Adjusted net income of Susy:
Net income of Susy
Amortization (P70,000 / 10) ÷ 2 ( 3,500)
NCI NIS (P96,500 x 30%)
P275,000
Dividends paid - Precy
Consolidated retained earnings, Dec. 31, 2013
P100,000
96,500
(28,950)
342,550
( 70 000)
P822,550
Minority interest in net assets of subsidiary
Stockholders' equity of Susy, June 30
Increase in earnings- net income (7/1 to 12/31)
Stockholders' equity, Dec. 31, 2008
Unamortized difference (P70,000 - P3,500)
Adjusted net assets of Susy, Dec. 31, 2013
P 900,000
100,000
P1,000,000
66,500
P1,066,500
NCI in net assets of subsidiary (P1,066,500 x 30%)
14.)
Pablo Corporation reported
Sitio Company reported
Sitio paid dividends
Total Sitio Company
Pablo holds 70% of Sitio Company
Total consolidated of CI attributable to parent
P 319,950
P130,000.00
70,000.00
(40,000.00)
30,000.00
21,000.00
P151,000.00
15.)
Acquisition Cost
Less: BV of Interest acquired (220k × 80%)
Difference
Allocated to: Depreciable Assets (P30,000/.80)
Minority Interest (P37,500 × .20 (P37,500 × .80)
Goodwill
Polo Net Income
Seed NI from operation
Net Income
Amortization (37,500 × .10)
(3,750)
Total
Less: Goodwill impairment loss
Consolidated NI
16.)
Consideration transferred (80%)
NCI (20%)
Total
Less: BV of NA- Seed
Excess
Less: Goodwill
Understatement of Depreciable Asset
*NCI = (216,000/80%) x 20
Net Income
P216,000
176,000
40,000
37,500
(7,500) (30,000)
P 10,000
P 95,000
35,000
31,250
P 126,250
(8,000)
P 118,250
P216,000
54,000
P270,000
220,000
P50,000
10,000
40,000
Polo (80%)
Seed (20%)
P95,000
P35,000
Under- DA (40,000/10) (4,000)
P95,000
P31,000
Share of Parent (80%)
Impairment Loss
24,800
(24,800)
(10,000-2,000)
(6,400)
(1,600)
Consolidated Net Income
P113,400
P4,600
*Impairment Loss:
Polo: 8,000 x 80% = 6,400
Seed: 8000 x 20% = 1,600
Retained Earnings, beg
Consolidated NI - Parent
Less: Dividends paid - Parent
Consolidated Retained Earnings
P520,000
113,400
46,000
P587,400
17.)
NCI = subsidiaries net income * NCI percentage - 80% of Goodwill subsidiaries net
income = 35,000
NCI percentage = 20% or 0.02
80% of Goodwill = 2,000 * 0.8 = 1,600
NCI = (35,000 * 0.2) - 1,600 = P5,400
18.) No solution provided, for I only guessed my answer.
19.)
CI of parent from own operations - 95,000
CI of subsidiary attributable to parent - (35,000 * 80%) = 28,000
Less: Impairment of Goodwill - (8,000 * 80%) = -6,400
Less: Excess attributable to depreciable asset - (40,000 * 80% / 10) = 3,200
95,000
28,000
(6,400)
(3,200)
TOTAL: P113,400