BusCom Subsequent
BusCom Subsequent
BusCom Subsequent
SUBSEQUENT TO ACQUISITION
On December 31, 2012, Sub Company reported net income of P525,000 and paid dividends
of P180,000 to Perry. Perry reported earnings from its separate operations of P1,425,000
and paid dividends of P690,000. Goodwill had been impaired and should be reported at
P30,000 on December 31, 2012.
1. What is the non-controlling interest in net income of Sub Company on December 31,
2012?
A. P93,750
B. P93,000
C. P105,000
D. P69,000
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5. What amount of NCI is to be presented in the consolidated statement of financial
position on December 31, 2012?
A. P821,250
B. P834,000
C. P772,500
D. P727,500
Problem 2. The following are the statement of financial position of Polly and Sally Company as of
December 31, 2011.
Polly Sally
Cash P 250,000 P 50,000
Receivables 175,000 37,500
Inventories 200,000 62,500
Land 187,500 250,000
Building (net) 800,000 250,000
Equipment (net) 625,000 600,000
Total Assets P 2,237,500 P 1,250,000
Polly decided to acquire 17,000 outstanding shares of Sally on January 1, 2012. Polly will
issue 25,500 ordinary shares with market value of P30 per share in exchange for the
17,000 outstanding shares of Sally. Polly and Sally's ordinary shares both have a par value
of P25 per share. The book values reflect fair values except for building of Polly, which has a
net realizable value of P1,050,000 and inventories and land of Sally which have a net
realizable value of P87,500 and P325,000, respectively. Polly also paid costs of registering
and issuing securities amounting to P30,000 and related costs of combination amounting
to P62,500.
Strawberry Company's stockholder's equity components at the end of this year are
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as follows: Common stock 100 par, P1,000,000, APIC P450,000, Retained Earnings
P890,000.
Non-controlling interest is measured at fair value.
All the assets of Strawberry were fairly valued, except for inventories, which are
overstated by P44,000, and equipment, which was understated by P60,000.
Remaining useful life of equipment is 4 years.
Both companies use the straight-line method for depreciation and amortization.
Stockholder's equity of Periwinkle on June 1, 2012 is composed of Common stock
P3,000,000, APIC P700,000, Retained Earnings P2,100,000.
Fair value of non-controlling interest on the date of acquisition is P470,000.
Goodwill, if any, should be written down by 56,900 at year-end.
Net Income for the first year of parent and subsidiary are P300,000 and P170,000
respectively.
Dividends declared amounted to P80,000 and P60,000. During the year, there was
no issuance of new ordinary shares.
What is the balance of the non-controlling interest in net assets of subsidiary on December
31, 2012?
A. P580,670
B. P508,970
C. P496,970
D. P487,670
Problem 4. On April 1, 2012, AJ Corp. acquired 80% of the outstanding stocks of SB Corp.
for P2,500,000.
SB Corp.'s stockholders' equity at the end of 2012 were as follows: Common stock,
P80 par P2,000,000, Additional paid-in capital P500,000, and Retained Earnings
P750,000.
The fair value of the non-controlling interest is P685,000.
All the assets of SB were fairly valued except for its inventories which are overvalued
by P90,000, Land which is undervalued by P50,000, and Patent which is
undervalued by P125,000. The said patent has a remaining useful life of five years.
Both companies use the straight line method for depreciation and amortization.
Shareholders' equity of AJ Corp. on December 31, 2012 is composed of: Common
stock, P50 par P3,500,000, APIC P750,000, and Retained Earnings P2,460,000.
Goodwill, if any, should be decreased by P22,500 at year-end.
No additional issuance of capital stocks occurred.
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For the two years ended, December 31, 2012 and 2013, AJ Corp. and SB Corp. reported the
following:
AJ Corp. SB Corp.
On 2012 2013 2012 2013
Net income from P485,000 (from date
own operations P525,000 P550,000 of acquisition) P520,000
Dividends declared
at year-end P 50,000 P 35,000 P 35,000 P 50,000
December 31, 2012, compute for:
Cost of Unsold at
Product Sales End of Year Sold to
Year Seller Sold Buyer Price Year Outsiders
2011 GV Co. P448,000 DL Co. P640,000 P140,000 2012
2012 DL Co. P312,000 GV Co. P480,000 P 77,000 2013
2012 GV Co. P350,000 DL Co. P437,500 P 63,000 2013
The following data summarized the results of their financial operations for the year ended,
December 31, 2012:
GV
Company DL Company
Sales P3,850,000 P1,680,000
Gross Profit 1,904,000 504,000
Operating Expenses 770,000 280,000
Ending Inventories 336,000 280,000
Dividend Received from affiliate 126,000 -
Dividend Received from non- - 70,000
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affiliate
For the year ended 2012, compute:
1. Consolidated sales and Consolidated cost of goods sold
A. P4,612,500; P2,457,550
B. P4,612,500; P2,206,950
C. P4,612,500; P2,202,050
D. P5,530,000; P2,202,050
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Problem 7. On January 1, 2012, RDJ Company purchased 80% of the stocks of MCD
Corporation at book value. The stockholders7 equity of MCD Corporation on this date
showed: Common stock - PI,140,000 and Retained earnings - P980,000.
On April 30, 2012, RDJ Company acquired a used machinery for P168,000 from MCD
Corp. that was being carried in the latter's books at P210,000. The asset still has a
remaining useful life of 5 years.
On the other hand, on August 31, 2012, MCD Corp. purchased an equipment that
was already 20% depreciated from RDJ Co. for P690,000. The original cost of this
equipment was P750,000 and had a remaining life of 8 years.
Net income of RDJ Co. and MCD Corp. for 2012 amounted to P720,000 and
P310,000. Dividends paid totaled to P230,000 and P105,000 for RDJ Co. and MCD
Corp, respectively.
Net income attributable to parent's shareholders equity and non-controlling interest net
income
A. P826,870; P69,280
B. P826,870; P62,000
C. P834,150; P62,000
D. P834,150; P59,280
Non-controlling interest in net assets and Carrying value of the Property and equipment
A. P472,280; P810,000
B. P465,000; P810,000
C. P465,000; P757,000
D. P472,280; P757,000
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D. P515,250
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