Professional Documents
Culture Documents
c, [(P260,000/80%) x 20%]
16-2:
16-3:
16-4:
c
Investment cost (price paid)
P500,000
480,000
P 60,000
16-5:
Cost Method
P500,000
P500,00
0
NCI
balance, December 31, 2013
a
Punos CI
16-7:
16-8:
Equity
Method
P500,000
120,000
( 48,000)
( 3,000)
P569,000
P 90,000
(16,000)
40,000
P114,00
0
P 145,000
( 36,000)
109,000
120,000
P 229,000
P1,000,000
200,000
1,200,000
40,000
P1,160,00
0
68
2011
P310,000
2012
P396,200
150,000
( 60,000)
( 3,800)
P396,200
180,000
(60,000)
( 3,800)
P512,400
2013
P512,400
200,000
( 60,000)
( 3,800)
P648,600
a
Sys CI
P300,000
( 60,000)
P500,000
P200,000
40,000
(16,000)
( 8,000)
216,000
( 50,000)
P666,000
P1,700,000
1,260,000
P 440,000
( 40,000)
P 400,000
P243,750
(25,000)
36,000
P182,75
0
16-14: b
Prestos CI from own operations
Storks CI March to December (P80,000 P23,000)
NCI share in Storks CI (P57,000 x 10%)
P140,000
57,000
( 5,700)
69
P 1,500
16-16 d
Consolidated CI:
P210,000
P67,000
CI -2013
4,000
63,000
P273,00
0
P701,000
P185,000
P40,000
4,000 36,000
210,200
( 50,000)
P861,200
(10,800)
254,100
( 60,000)
P1,055,300
P 700,000
300,000
1,000,000
900,000
P 100,000
5,000
16-17, continued:
P550,000
P275,000
P100,000
70
( 5,000)
95,000
(28,500)
341,500
( 70,000)
P821,500
P300,000
-028,500
P328,50
0
16-18: a
Goodwill
Price paid
P1,200,000
1,000,000
P130,000
(28,000)
70,000
(21,000)
P151,000
P 90,000
(9,000)
40,000
(16,000)
P105,000
16-20, continued:
P 400,000
P70,000
(18,000)
35,000
( 14,000)
75,000
(25,000)
P450,000
105,000
71
(30,000)
P525,000
P216,000
54.000
270,000
220,000
50,000
10,000
Depreciable assets
(40,000)Consolidated CI, December 31, 2013:
Polo CI from own corporation
Goodwill
Seed CI from own operation:
CI
Amortization (40,000 10%)
GW impairment lost
23,000
P 95,000
35,000
(4,000)
(8,000)
P118.00
0
16-22: cTotal
Retained earnings 1/1/013 Polo
Consolidated CI attributed to parent:
Consolidated CI
113,400Total
P520,000
118,000
(4,600)
633,400
(46,000)
P587,400
16-24: c
NCI, January 2, 2013
NCI ins Seeds dividends (P15,000 x 20%)
NCI in Seeds CI
16-25: cNCI,
(seeDecember
no. 16-22)31, 2013
P 54,000
(3,000)
4,600
P 55,600
16-26: a
72
P231,000
99,000
280,000
(50,000)
75,000
P569,000
133,000
(6,000)
127,000
( 50,000)
P646,000
P3,000,000
1,750,000
500,000
5,250,000
5,000,000
P
250,000
P280,000
240,000
73
Gain to APIC
P 40,000
Since the APIC is only P30,000 on the date of sale, the remaining P10,000 is to be
credited to retained earnings account.
PROBLEMS
Problem 16-1
1.
P 312,500
Parent
Price
(80%)
NCI
Value
(20%)
P 250,000
P 62,500
P 100,000
74
Retained earnings
150,000
Total equity
P 250,000
P 250,000
P 250,000
80%
20%
P200,000
P 50,000
P 50,000
P 12,500
Interest acquired
Book value
P 62,500
Excess
Allocation to:
62,500
Fixed assets
2.
Eliminate dividends declared by the subsidiary against dividend income and NCI:
Dividend income
4,000 NCI
1,000
b.
d.
62,500
e.
50,000
12,500
6,250
Fixed
assets net income:
Recognize NCI in
subsidiary
6,250
NCI in subsidiary
CI
3,750
NCI
Probem 16-1
3,750
concluded
3.
Pedro Company
Consolidated Statement of CI
Year Ended December 31,
2013
Sales
Expenses
Consolidated CI
P250,000
191,250
P 58,750
75
Attributable to NCI
3,750
P 55,000
Pedro Company
Statement of Retained Earnings
Year Ended December 31, 2013
Retained earnings, January 1 Pedro Company
Consolidated CI attributable to controlling interest
Retained earnings, December 31, 2011
5.
P200,000
55,000
P255,000
Pedro Company
Consolidated Statement of Financial Position
December 31, 2013
Assets
Current assets
P190,000
Non-current assets
530,250
P720,250
P100,000
Stockholders Equity:
Controlling interest:
Common stock
Retained earnings
Total
P300,000
255,000
P555,000
620,250
P720,250
65,250
Problem 16-2
1.
Depreciate the fixed asset for the current year and one prior year:
Retained earnings, Jan. 1 Sulu (prior year)
6,250 Expenses (current year)
6,250
76
Fixed assets
e.
Recognize
NCI in subsidiary CI:
12,500
NCI in subsidiary CI
e.
1,750
NCI
Assign to the NCI their share of the increase in the subsidiarys
Adjusted1,750
undistributed earnings of prior year:
Retained earnings, January 1Sulu NCI
2,750
0 P170,000
150,000
P 20,000
6,250
P 13,750
20%
NCI
2.
2,75
P 2,750
Pedro Company
Consolidated Statement of CI
Year Ended December 31,
2013
Sales
P300,000
251,250
P 48,750
1,750
Attributable to NCI
P 47,000
Problem 16-3
Amortization Schedule
Annual
Accounts Adjustments
Life
Amount
2010
P 6,250
P 6,250
Investments
5,000
Buildings
20
12,500
Inventory
2011
2012
2013
5,000
5,000
5,000
5,000
12,500
12,500
12,500
12,500
Amortization:
77
Equipment
34,500
34,500
34,500
34,500
34,500
Patent
10
2,250
2,250
2,250
2,250
2,250
Trademark
10
2,000
2,000
2,000
2,000
2,000
2,500
2,500
2,500
2,500
2,500
P 65,000
P 65,000
Total
P 58,750 P 58,750
P58,750
Problem 16-4
Allocation Schedule
Price paid
P206,000
140,000
P 66,000
P(40,000)
10,000
(30,000)
P 36,000
P 206,000
b.
Non-controlling interest
P -0-
c.
Consolidated CI
CI from own operations Pony (P310,000 P198,000)
CI from own operations Stag (P104,000 P74,000)
Amortization: Equipment (P40,000/8)
P5,000
d.
Buildings (P10,000/20)
Consolidated CI
Consolidated Equipment
Total book value (P320,000 + P50,000)
Allocation
Amortization (P5,000 x 3 years)
Total
Problem 16-4
concluded
e.
Consolidated Buildings
Total book value
Allocation
Amortization (P500 x 3 years)
Total
f.
(500)
P 112,000
30,000
( 4,500)
P 137,500
P 370,000
40,000
(15,000)
P 395,000
P 288,000
( 10,000)
1,500
P 279,500
P 36,000
78
g.
h.
P 290,000
a.
5,500
415,500
P10,000
( 4,500)
410,000
(2)
Dividend income
Dividends declared Short
To eliminate intercompany
dividends.
Common stock Short
Retained earnings Short
Investment in Short Company
To eliminate equity accounts of Short
at date of acquisition
(3)
(4)
10,00
0
10,00
0
100,00
0
50,000
Depreciable asset
150,00
0
30,00
0
Investment in Short
Company To allocate excess
Depreciation expense
Depreciable asset
30,00
0
5,00
0
5,00
0
To amortize
allocatedexcess
Problem 16-5
concluded
b.
Short
Adjustments
& Eliminations
Consoli-
Corporation
Company
Debit
Credit
dated
Statement of CI
79
Sales
Dividend income
Total
200,000
120,000
10,000
320,000
(1) 10,000
210,000
120,000
25,000
15,000
Other expenses
105,000
75,000
180,000
Total
130,000
90,000
225,000
80,000
30,000
95,000
230,000
50,000
80,000
30,000
95,000
310,000
80,000
325,000
40,000
10,000
270,000
70,000
285,000
Cash
15,000
5,000
20,000
Accounts receivable
30,000
40,000
70,000
Inventory
70,000
60,000
130,000
325,000
225,000
180,000
Depreciation
CI carried
forward
320,000
(3)
5,000
45,000
Retained Earnings
Retained earnings, Jan. 1
CI from above
Total
Dividends declared
(2) 50,000
230,000
(1) 10,000
40,000
Statement of FP
(3) 30,000
(4)
5,000
(2)150,000
575,000
-
(3) 30,000
Total
Accounts payable
Notes payable
620,000
330,000
795,000
50,000
40,000
90,000
100,000
120,000
220,000
Common stock
Pony
200,000
Short
Retained earnings, Dec. 31
From above
200,000
100,000
270,000
70,000
(2)100,000
285,000
80
Total
620,000
330,000
195,000
195,000
795,000
Problem 16-6
a.
(2)
(3)
b.
Dividend income
NCI
8,000
2,000
10,000
Dividends declared
CommonSisa
stock Sisa
Retained earnings Sisa
100,000
50,000
120,000
30,000
6,000
NCI
Popo Corporation and Subsidiary
Consolidated Working Paper
December 31, 2013
6,000
Popo
Sisa
Adjustments
& Eliminations
Consoli-
Corporation
Company
Debit
Credit
dated
Statement of CI
Sales
Dividend income
200,000
120,000
8,000
320,000
(1)
8,000
208,000
120,000
320,000
25,000
15,000
40,000
Other expenses
105,000
75,000
180,000
Total expenses
130,000
90,000
220,000
78,000
30,000
100,000
Total revenue
Depreciation expense
CI
NCI in CI of Sub.
CI carried
forward
(3)
78,000
30,000
6,000
( 6,000)
94,000
81
Retained Earnings
Retained earnings, 1/1
230,000
230,000
78,000
30,000
94,000
308,000
80,000
324,000
40,000
10,000
268,000
70,000
284,000
Current assets
173,000
105,000
278,000
Depreciable assets
500,000
300,000
800,000
120,000
Total
793,000
405,000
1,078,000
Accumulated depreciation
175,000
75,000
250,000
50,000
40,000
90,000
Long-term debt
100,000
120,000
220,000
Common stock
200,000
100,000 (2)100,000
200,000
268,000
CI from
above
Total
Dividends declared
Retained earnings, 12/31
Carried forward
(1) 10,000
40,000
Statement of FP
Current liabilities
(2)120,000
70,000
NCI
284,000
(1)
Total
793,000
405,000
2,000
(2) 30,000
(3) 6,000
34,000
166,000
166,000
1,078,000
P800,000
250,000
P278,000
550,000
P828,000
P 90,000
82
Long-term debt
Total liabilities
Stockholders Equity
Common stock
220,000
P310,000
P200,000
284,000
34,000
518,000
P828,000
P320,000
P 40,000
180,000
P100,000
Depreciation expense
Other expenses
220,000
6,000
Consolidated CI
P 94,000
NCI in CI of subsidiary
Popo
Corporation
and Subsidiary
Attributable
to parent
Consolidated Retained Earnings
Year Ended December 31, 2013
Retained earnings, Jan. 1 Popo
Consolidated CI attributable to parent
Total
P230,000
94,000
P324,000
40,000
P284,000
Problem 16-7
a.
Sebo
Adjustments
& Eliminations
Consoli-
Corporation
Company
Debit
Credit
dated
300,000
150,000
Statement of CI
Sales
Investment Income
Total revenues
19,000
319,000
450,000
(1) 19,000
150,000
450,000
83
210,000
85,000
295,000
Depreciation expense
25,000
20,000
45,000
Other expenses
23,000
25,000
48,000
258,000
130,000
388,000
61,000
20,000
62,000
230,000
50,000
61,000
20,000
62,000
291,000
70,000
292,000
20,000
10,000
271,000
60,000
272,000
Cash
37,000
20,000
57,000
Accounts receivable
50,000
30,000
80,000
70,000
300,000
60,000
240,000
130,000
540,000
(2) 50,000
230,000
(1) 10,000
20,000
Statement of FP
Inventory
Buildings and equipment
Investment in Sebo Company
229,000
(1)
9,000
(2)200,000
(3) 20,000
Goodwill
(3) 20,000
20,000
Total
686,000
350,000
827,000
Accumulated depreciation
105,000
65,000
170,000
Accounts payable
40,000
20,000
60,000
Taxes payable
70,000
55,000
125,000
Common stock
200,000
150,000
(2)150,000
271,000
686,000
60,000
350,000
239,000
200,000
239,000
272,000
827,000
84
b.
Consolidated Financial
Statements
Palo Corporation and Subsidiary
Consolidated Statement of CI
Year Ended December 31, 2013
Sales
P450,000
295,000
155,000
P45,000
48,000
Depreciation expenses
Other expenses
93,000
P 62,000
Palo
Corporation
Consolidated
CI and Subsidiary
Consolidated Retained Earnings
Year Ended December 31, 2013
Retained earnings, January 1 Palo
Consolidated CI
P230,000
62,000
292,000
20,000
P272,000
Total
Dividends paid Palo
Palo
Corporation
and Subsidiary
Retained
earnings, December
31
Consolidated Statement of Financial Position
December 31, 2013
Assets
Cash
Accounts receivable
Inventory
Buildings and equipment
Less: Accumulated depreciation
Goodwill
Liabilities and Stockholders
Equity
Total Accounts payable
Taxes payable
Common stock
Retained earnings, Dec. 31
Total
P 57,000
80,000
130,000
P540,000
170,000
370,000
20,000
P657,000
P 60,000
125,000
200,000
272,000
P657,000
85
Problem 16-8
1.
Company
Value
Estimated FV
Parent Price
NCI
(80%)
(20%)
P945,000
P756,000
P189,000
700,000
700,000
80%
20%
560,000
140,000
196,000
49,000
300,000
400,000
Total equity
700,000
Interest acquired
Book value
Excess of fair value over book value
245,000
Allocations:
Inventory
(30,000)
Land
(50,000)
(100,000)
Building
Equipment
75,000
Patent
(40,000)
Total
145,000
P 100,000
Goodwill
(2)
Common stock S
(3)
Investment income
10,000
Dividends declared S Company
50,000 Investment in S Company
54,800
300,000
400,000
560,000
140,000
30,000
50,000
100,000
40,000
100,000
75,000
86
Investment in S
Company NCI
(4)
196,000
49,000
30,000
Inventory
30,000
Equipment (P75,000 / 10)
7,500 Expenses (amortization)
1,500
(5)
Adjustments
& Eliminations
Consoli-
Company
Company
Debit
Credit
dated
1,000,000
500,000
Cost of sales
400,000
150,000
Gross profit
600,000
350,000
Expenses
360,000
200,000
Operating income
240,000
150,000
Statement of CI
Sales
Investment income
Net /consolidated income
94,800
334,800
150,000
NCI in CI of
Subsidiary
CI carried
forward
1,500,000
(4) 30,000
580,000
920,000
(4)
1,500
561,500
358,500
(1) 94,800
358,500
(5) 23,700
(23,700)
334,800
150,000
334,800
600,000
400,000
CI from
above
Total
334,800
150,000
334,800
934,800
550,000
934,800
Dividends declared
100,000
50,000
834,800
500,000
Retained earnings
(2)400,000
600,000
(1) 50,000
100,000
834,800
87
Statement of FP
Cash
200,000
100,000
300,000
Accounts receivable
150,000
50,000
200,000
Inventories
100,000
40,000
(3) 30,000
Land
150,000
(3) 50,000
Buildings (net)
200,000
(3)100,000
(4)
5,000
295,000
298,000
450,000
(4)
(3) 75,000
680,500
Equipment (net)
Patent
Investment in S Company
7,500
(3) 40,000
810,800
(4) 30,000
140,000
200,000
(4)
4,000
36,000
(1) 54,800
(2)560,000
(3)196,000
Goodwill
Total
(3) 100,000
100,000
1,951,500
1,558,800
1,090,000
Accounts payable
124,000
190,000
Common stock
200,000
300,000
400,000
400,000
834,800
500,000
834,800
NCI
314,000
(2)300,000
(1) 10,000
200,000
(2)140,000
2022,700
(3) 49,000
(5) 23,700
Total
1,558,800
1,090,000
486,200
486,200
1,951,500
Problem 16-9
a.
160,000
160,00
0
8,000
Dividend income
8,000 To record dividends received from Sally (P10,000 x 80%)
88
b.
2011
Dividend income
NCI
8,000
2,000
10,000
(2)
Dividends declared
CommonSally
stock Sally
(3)
(4)
100,000
50,000
120,000
30,000
50,000
Investment in Sally
Products NCI
Retained earnings, 1/1 Sally (prior year)
Depreciation expense (current year)
(5)
(6)
Cash and
NCI in CIreceivables
of subsidiary
(7)
NCI
(P30,000 P5,000) x 20%
Retained earnings, 1/1 Sally
40,000
10,000
5,000
5,000
10,000
10,000
10,000
5,000
5,000
7,000
NCI
To recognize NCI in subsidiarys prior year earnings
7,000
Sally
Wood
Products
200,000
100,000
Adjustments
& Eliminations
Consoli-
Debit
Credit
dated
Statement of CI
Sales
Dividend income
Total revenue
8,000
208,000
300,000
(1)
100,000
8,000
300,000
89
120,000
50,000
Depreciation expense
25,000
15,000
Inventory losses
15,000
5,000
20,000
160,000
70,000
235,000
48,000
30,000
65,000
170,000
(4)
5,000
45,000
NCI in CI of
subsidiary
CI carried forward
(6)
5,000
(5,000)
48,000
30,000
60,000
298,000
90,000
48,000
30,000
60,000
346,000
120,000
386,000
30,000
10,000
316,000
110,000
81,000
65,000
260,000
90,000
350,000
80,000
80,000
160,000
500,000
150,000
Investment in Sally
160,000
CI from
above
Total
Dividends declared
Retained earnings, 12/31
carried forward
(2) 50,000
(4) 5,000
(7) 7,000
326,000
(1) 10,000
30,000
356,000
Statement of FP
Cash and receivables
Inventory
Land
(5) 10,000
(3) 50,000
136,000
700,000
(2)120,000
(3) 40,000
Total
1,081,000
385,000
1,346,000
Accumulated depreciation
205,000
105,000
Accounts payable
Notes payable
60,000
200,000
20,000
50,000
(5) 10,000
Common stock
300,000
100,000
(2)100,000
(4)
10,000
300,000
70,000
250,00
0
300,000
90
316,000
110,000
NCI
356,000
(1)
Total
1,081,000
385,000
2,000
(2) 30,000
(3) 10,000
(6) 5,000
(7) 7,000
242,000
242,000
50,000
1,346,000
Problem 16-10
Determination and Allocation of Excess Schedule (not required)
Price paid
P220,000
P150,000
50,000
200,000
P 20,000
Dividend Income
20,00
0
Dividends Declared
E(2)
E(3)
Eliminate
dividend
income
from
Common Stock
Star
Company
subsidiary.
Retained Earnings, January 1
150,00
0
50,000
8,000
12,00
0
Porno
Star
Corporation
350,000
20,000
Company
200,000
370,000
270,000
25,000
21,000
20,00
0
200,00
0
20,00
0
Eliminations
Debit
-
Credit
(1) 20,000
200,000
135,000
20,000
10,000
(316,000)
(165,000)
__
54,000
35,000
20,000
Consolidated
550,000
_______
550,000
405,000
45,000
31,000
____
(481,000)
69,000
91
60,000
262,000
54,000
Dividends declared
Retained earnings, Dec. 31,
carry forward
35,000
316,000
95,000
(20,000)
(2) 50,000
(3) 12,000
20,000
(20,000)
75,000
69,000
(1) 20,000
___82,00020,000
260,000
329,000
(20,000)
309,000
296,000
Problem 16-10,
Concluded
Statement of FP
Cash
Accounts receivable
Inventory
Buildings and equipment
Investment
Goodwill in Star Company
Debits
Accumulated depreciation
Accounts payable`
Taxes payable
Common stock
Light Corporation
Star Company
46,000
55,000
75,000
300,000
220,000
696,000
130,000
20,000
50,000
200,000
296,000
696,000
30,000
40,000
65,000
240,000
76,000
95,000
140,000
540,000
(2)200,000
(3) 20,000
375,000
8,000
859,000
(3) 8,000
85,000
30,000
35,000
150,000
75,000
375,000
215,000
50,000
85,000
(2)150,000
82,000
240,000
200,000
20,000
240,000
309,000
859,000
(1)
Company
Parent
NCI
Implied
Price
Fair
Value
P465,000
(90%)
Valu
e
(10%)
P418,600
P46,500
100,000
Retained earnings
250,000
Total equity
350,000
315,000
35,000
P115,000
P103,500
P11,500
Amortization
Life
Adjustments:
92
P115,000
Equipment
(2)
P5,750/yr
20 yrs.
Entries:
Investment in Venus Company
Retained earnings*
195,300
Investment income**
137,475
57,825
To
the investment
to its carrying
(equity
method)
adjust
Retained
earnings account
= 90% amount
x P170,000
change
in retained earnings 3 years of
Equipment depreciation (3 x 90% x P5,750) = P137,475.
** Investment income = 90% x (P70,000 - P5,750 equipment depreciation) = P57,825.
Problem 16-11
continued:
Cash
700,000
545,600
154,400
+ P195,300 adjustment)
Gain on sale of investment
To record the sale of the 8,000 shares of Venus stock.
Problem 16-12
Entries on Plutos books, January 1, 2014:
Investment in Saturn Company
2,960*
2,960
10,960
29,040
Company
Parent
NCI
Implied
Price
Fair
Value
P200,000
(80%)
Valu
e
(20%)
P160,000
P40,000
150,000
120,000
30,000
P50,000
P40,000
P10,000
93
Adjustment
Amortization
Life
Machine
P20,000
P4,000/yr
5 yrs.
Goodwill
30,000
Total
P50,000
*Equity adjustment
Income
P110,000
(16,000)
Dividends
(20,000)
Total
P74,000
P2,960
94