On January 1, 2016, B Company acquired 80% of A Company’s common stock for P280,000 cash. At that date, A reported common stock outstanding of P200,000 and retained earnings of P100,000, and the fair value of the
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On January 1, 2016, B Company acquired 80% of A Company’s common stock for P280,000 cash. At that date, A reported common stock outstanding of P200,000 and retained earnings of P100,000, and the fair value of the non-controlling interest was P70,000. The book values and fair values of A’s assets and liabilities were equal, except for intangible assets which has a fair value of P50,000 greater than book value and an 8-year remaining life. A reported the following data for 2016 and 2017.
|
Year |
Net Income |
Comprehensive Income |
Dividends Paid |
|
2016 |
25,000 |
30,000 |
5,000 |
|
2017 |
35,000 |
45,000 |
10,000 |
B reported separate net income from own operations of P100,000 and paid dividends of P30,000 for both years.
What is the amount of consolidated comprehensive income reported for 2016?
What is the amount of comprehensive income attributable to controlling interest for 2017?
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- On January 1, 2018, ICT Company purchased 80% of ESP Company's stock for P975,000. On this date, the carrying amount of ESP Company's net assets were P1,000,000. The fair value of ESP Company's identifiable assets and liabilities were the same as their carrying amount except for plant assets (net) which were P100,000 in excess of the carrying amount. For the year ended, ESP Company had a net income of P190,000 and paid cash dividends totaling P125,000. Parent opted to measure NCI proportionate to its share on ESP's identifiable net assets. In the December 31, 2018 consolidated balance sheet, NCI should be reported at:On June 30, 2016, Gab Company purchased 25% of the outstanding ordinary shares of IB Co. at a total cost of P2,100,000. The book value of IB Co.’s net assets on acquisition date was P7,200,000. For the following reasons, Gab was willing to pay more than book value for the IB Co. shares: IB Co. has depreciable assets with a current fair value of P180,000 more than their book value. These assets have a remaining useful life of 10 years. IB Co. owns a tract of land with a current fair value of P900,000 more than its carrying amount. All other identifiable tangible and intangible assets of IB Co. have current fair values that are equal to their carrying amounts. IB Co. reported net income of P1,620,000, earned evenly during the current year ended December 31, 2016. Also in the current year, it declared and paid cash dividends of P315,000 to its ordinary shareholders. Market value of IB Co.’s ordinary shares at December 31, 2016 is P9 million. Cabbage Company’s financial year-end is…On June 30, 2016, Gab Company purchased 25% of the outstanding ordinary shares of IB Co. at a total cost of P2,100,000. The book value of IB Co.’s net assets on acquisition date was P7,200,000. For the following reasons, Gab was willing to pay more than book value for the IB Co. shares: IB Co. has depreciable assets with a current fair value of P180,000 more than their book value. These assets have a remaining useful life of 10 years. IB Co. owns a tract of land with a current fair value of P900,000 more than its carrying amount. All other identifiable tangible and intangible assets of IB Co. have current fair values that are equal to their carrying amounts. IB Co. reported net income of P1,620,000, earned evenly during the current year ended December 31, 2016. Also in the current year, it declared and paid cash dividends of P315,000 to its ordinary shareholders. Market value of IB Co.’s ordinary shares at December 31, 2016 is P9 million. Cabbage Company’s financial year-end is…
- On March 1, 2017, Mindoro Company purchased 40% of the outstanding ordinary shares of Garapal Company for P3,500,000 when the net assets of Garapal amounted to P7,000,000. At acquisition date, the carrying amounts of the identifiable assets and liabilities of Garapal were equal to their fair value, except for equipment for which the fair value was P1,500,000 greater than its carrying amount and inventory whose fair value was P500,000 greater than its cost. The equipment has a remaining life of4 years and the inventory was all sold during 2017. Garapal Company reported net income of P5,000,000 for 2017 add paid P3,000,000 dividends during 2017. REQUIRED: Journal entries (no compounding of entries) Investment income Carrying amount of investment Under Equity Method Under Fair ValueOn 1 July 2022, Dean Ltd acquired the remaining 80% of the issued shares of Lewis Ltd for shares in Dean Ltd with a fair value of $1 000 000. At that date, the financial statements of Lewis Ltd showed the following information. All the assets and liabilities of Lewis Ltd were recorded at amounts equal to their fair values at the acquisition date, except some equipment recorded at $50 000 below its fair value with a related accumulated depreciation of $80 000. Assume the equipment has not been revalued in the subsidiaries accounts. Also, Dean Ltd identified at acquisition date a contingent liability related to a lawsuit where Lewis Ltd was sued by a former supplier and attached a fair value of $40 000 to that liability. The previous held interest by Dean Ltd in Lewis Ltd (ie 20% of the issued shares) was recognised by in Dean Ltd.’s accounts at the fair value at acquisition date of $250 000. Dean Ltd incurred $15 000 in acquisition related costs including $10 000 in share issue costs.…On 1 July 2021, James Ltd acquired all the issued shares of Dean Ltd for $350,000. At this date, the financial statements of Dean Ltd showed the following: $ Share capital 270,000 Retained earnings 26,500 General Reserve 8,800 Total equity 305,300 Goodwill 25,000 At acquisition date, all the net identifiable assets and liabilities in Dean Ltd were recorded at amounts equal to their fair value except for: Asset Carrying amount ($) Fair Value ($) Inventories 15,000 18,000 Plant (cost $400,000) 210,000 220,000 The Plant was calculated to have a further life of 5 years, and was depreciated on a straight-line basis. All inventory was sold by 30 June 2020. Assume 30% tax rate Required: Prepare the acquisition analysis at 1 July 2021. Prepare the consolidation entries at acquisition date, 1 July 2021. Include narrations for each entry. Prepare the consolidation worksheet as at 1 July 2021. Prepare a Balance sheet for the reporting Group, James Ltd as at 1 July 2021 in narrative format.
- On January 1, 2022, Pop Co. acquired 75% of the outstanding common shares of Soda Inc. for $161,250 cash. On that date, Soda had common shares of $156,250 and retained earnings of $31,250. At acquisition, the identifiable assets and liabilities of Soda had fair values that were equal to carrying amounts except for inventory, which had fair value $8,000 greater than carrying amount and plant and equipment, which had fair values $10,000 greater than carrying amounts. The plant and equipment had a remaining useful life of 5 years on January 1, 2022.Any goodwill will be tested yearly for impairment. Balance sheets as of December 31, 2022 are presented below: Cash Accounts receivable Inventory Land Plant & Equipment, net Investment in Soda Inc. - equity Current liabilities Bonds payable Common shares Retained earnings Pop Co. $ 10,000 Soda Inc. $ 5,000 38,750 42,250 75,250 62,500 50,000 100,000 150,000 175,000 168,500 $384,750 $492,500 $ 45,500 - 338,000 109,000 $492,500 $ 47,125 128,125…On January 1, 2020, B Company acquired 80% of A Company’s common stock for Php280,000 cash. At that date, A reported common stock outstanding of Php200,000 and retained earnings of Php100,000, and the fair value of the non-controlling interest was Php70,000. The book values and fair values of A’s assets and liabilities were equal, except for intangible assets which has a fair value of Php50,000 greater than book value and an 8-year remaining life. A reported the following data for 2020 and 2021. Year Net Income Comprehensive Income Dividends Paid 2020 25,000 30,000 5,000 2021 35,000 45,000 10,000 B reported separate net income from own operations of Php100,000 and paid dividends of Php30,000 for both years. What is the amount of consolidated comprehensive income reported for 2020?On January 1, 2017, Parent Company purchased 80% of Subsidiary Company's stock for P975,000. On this date, the carrying amount of Subsidiary Company's net assets were P1,000,000. The fair value of Subsidiary Company's identifiable assets and liabilities were the same as their carrying amount except for plant assets (net) which were P100,000 in excess of the carrying amount. For the year ended, Subsidiary Company had a net income of P190,000 and paid cash dividends totaling P125,000. Parent opted to measure NCI proportionate to its share on subsidiary's identifiable net assets. In the January 1, 2017 consolidated balance sheet, goodwill should be reported at:
- On March 31, 2016, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $17,000,000 in cash. The book values and fair values of Barney's assets and liabilities were as follows: Fair Value Book Value $ 6,000,000 $ 7,500,000 Current assets Property, plant, and equipment Other assets Current liabilities 11,000,000 1,000,000 4,000,000 6,000,000 14,000,000 1,500,000 4,000,000 5,500,000 Long-term liabilities Required: Calculate the amount paid for goodwill.On July 1, 2016, Roland Company exchanged 18,000 of its $45 fair value ($1 par value) shares for all the outstanding shares of Downes Company. Roland paid acquisition costs of $40,000. The two companies had the following balance sheets on July 1, 2016: (see attachment)The following fair values applied to Downes’s assets:Other current assets . . . . . . . . . . . $ 70,000Inventory . . . . . . . . . . . . . . . . . . . 80,000Land. . . . . . . . . . . . . . . . . . . . . . . 90,000Building . . . . . . . . . . . . . . . . . . . . 150,000Equipment . . . . . . . . . . . . . . . . . . 100,0001. Record the investment in Downes Company and any other entry necessitated by the purchase.2. Prepare the value analysis and the determination and distribution of excess schedule.3. Prepare a consolidated balance sheet for July 1, 2016, immediately subsequent to the purchase.At the beginning of 2018, Esterlina Corporation purchased 40% of the ordinary shares outstanding of Mary Grace Incorporated for P15, 000,000 when the netassets of Mary Grace Incorporated amounted to P30,000,000. At the acquisition date, the carrying amounts of the identifiable assets and liabilities of Mary Grace Incorporated were equal to their fair value, except for the following: a. Equipment whose fair value was P7,000,000 greater than its carrying amount. b. Inventory whose fair value was P2,500,000 greater than its carrying amount. The equipment has a remaining life of 4 years, and the inventory was all sold during 2013. Mary Grace Incorporated has two classes of shares: Ordinary shares (par value, P100), 300,000 shares outstanding, 15% cumulative preference shares (par value, P50), 100,000 shares outstanding The investee reported the following net income (inclusive of enter-company transactions) and payment of cash dividend: Net Income Dividend payment 2018 20,000,000 5,000,000…
