AA2 - CHAPTER 3

SUGGESTED ANSWERS
EXERCISES

Exercise 3 -1
1. Investment in Stun Corp.
Consideration transferred (800 shares @ P200) P160,000
Book value of interest acquired as of July 1, 2014
Ordinary Share Capital (1,000 shares x P100 x 80%) P80,000
Retained Earnings [(P50,000 + 1/2 of P30,000) 80%] 52,000 132,000
Goodwill P 28,000

2. Investment in Star Corp.

Consideration transferred (900 shares @ P100) P 90,000
Book value of interest acquired as of July 1, 2014
Ordinary Share Capital (1,000 shares x P100 x 90%) P90,000
Retained Earnings [(P15,000 + 1/2 of P5,000) 90%] ( 15,750) 74,250
Goodwill P 15,750

Exercise 3 - 2

Cost Method
a. Investment in Stark Co. 1,500/2,000 = 75% 240,000
Cash 240,000

b. no entry

c. Cash P30,000 x 75% 22,500

Dividend Revenue P30,000 x 6/12 = P15,000 x 75% 11,250
Investment in Stark Co. 11,250

d. no entry

2. Ordinary Share Capital P200,000

APIC 50,000
RE [P20,000 + (P30,000 x 1/2)] 35,000
Total shareholders equity on date of acquisition P285,000
x 75%
Book value of interest acquired P213,750

Exercise 3 3
1. Investment in Saturn Co. 800,000
Cash 800,000

Cash P80,000 x 80% 64,000

Dividend Revenue 64,000

2. Original cost of investment P800,000

3. Non-controlling interest net income = P200,000 x 20% = P40,000

Chapter 3 AA2 (2014 edition) page 2

4. Non-controlling interest, December 31, 2014:

Ordinary Share Capital P 500,000
Retained Earnings = P500,000 + P200,000 P80,000 620,000
Total P1,120,000
Non-controlling interest percentage x 20%
Non-controlling interest P 224,000

Exercise 3 4

a. Investment in Saloon Corp. 67,500

Cash 67,500
750 shares @ P90 = P67,500

b. No entry

c. Received 75 shares from Saloon Corp. as share capital dividend. Shares now owned and held are
825 shares.

d. Cash 4,125
Dividend Revenue 4,125
825 shares @ P5 = P4,125

e. No entry

Exercise 3 5

2013 P90,000 x 60% P 54,000

2014 P180,000 x 60% P108,000
2015 P135,000 x 60% P 81,000

Exercise 3 - 6
Case A Case B Case C
Net income (loss) from own operations:
Pastel Corp. P 80,000 P(20,000) P40,000
Sly Corp. (90%-owned) (13,500) 45,000 27,000
Sty Corp. (70%-owned) 31,500 49,000 24,500
Depreciation:
Excess of cost over book value of
investment in Sly (P9,000/90%/5 yrs.) ( 2,000)
Excess of book value over cost of
investment in Sty (P3,500/70%/5 yrs.) ________ ________ 1,000
Consolidated net income P 98,000 P 74,000 P90,500

Exercise 3 7
1. a. Investment in Sat Co. 16,000
Retained Earnings, Pat Co. 16,000
To record the share of Pat in the net increase
in the retained earnings of Sat.
Chapter 3 AA2 (2014 edition) page 3

(P70,000 - P50,000) 80% = P16,000

b. Ordinary Share Capital, Sat Co. 200,000

Retained Earnings , Sat Co. 70,000
Assets 10,000
Investment in Sat Co. P208,000 + P16,000 224,000
Non-controlling Interest P280,000 x 20% 56,000
To eliminate shareholders equity balances and
establishing non-controlling interest.
208,000 (250,000 x 80%) = 8,000/80% = 10,000

c. Operating Expenses 1,000

Retained Earnings, Pat Co. 2,000
Assets 3,000
To record depreciation of adjustment for prior
years and current year at P1,000 per year.

2. Pat and Subsidiary Sat Co.

Consolidated Working Paper
For the Year Ended December 31, 2014
Adj. & Eliminations Cons. Non-cont Cons.
Debits Pat Co. Sat Co. Debit Credit IS Interest SFP
Cash & Other Assets 452,000 440,000 b. 10,000 c. 3,000 899,000
Investment in Sat 208,000 a. 16,000 b. 224,000
Cost of Sales 300,000 200,000 500,000
Operating Exp. 90,000 50,000 c. 1,000 141,000
Total 1,050,000 690,000 899,000
Credits
Liabilities 150,000 120,000 270,000
OSC, P100par 300,000 200,000 b. 200,000 300,000

Ret. Earnings 100,000 70,000 b. 70,000 a. 16,000 114,000

c. 2,000
Sales 500,000 300,000 (800,000)
1,050,000 690,000
Consolidated NI 159,000
Non-cont. int. NI 9,800 9,800
NI attrib. to parent 149,200 149,200
Non-cont. int. b. 56,000 56,000 65,800
Total 245,000 245,000 899,000
NCI net income (300,000 -200,000-50,000-1,000) x 20% = 9,800

3.
Pat Co. and Subsidiary Sat Co.
Consolidated Income Statement
For the Year Ended December 31, 2014
Sales (P500,000 + P300,000) P800,000
Cost of Sales (P300,000 + P200,000) 500,000
Gross Profit P300,000
Operating Expenses (P90,000 + P50,000 + P1,000) 141,000
Chapter 3 AA2 (2014 edition) page 4

Consolidated Net Income P159,000

Less Non-controlling Interest net income 9,800
Net Income Attributable to Pat Co. P149,200
4.
Pat Co. and Subsidiary Sat Co.
Consolidated Statement of Financial Position
December 31, 2014
Assets Liabilities and Shareholders Equity
Cash and Other Assets P899,000 Liabilities P270,000
Ordinary Share Capital, P100 par 300,000
Retained Earnings 263,200
Non-controlling Interest 65,800
Total Assets P899,000 Total liabilities and shareholders Equity P899,000

Exercise 3 - 8
a. Advances from Pallet Co. 15,000
Advances to Stall Co. 15,000
b. Notes Receivable Discounted 10,000
Notes Receivable from Pallet Co. 10,000
c. Note Payable to Stall Co. 5,000
Note Receivable from Pallet Co. 5,000
d. Dividends Payable 1,600
Dividends Receivable 1,600

PROBLEMS
Problem 3 1
1. Investment in Stow Co. 280,000
Cash 280,000

Consideration transferred P280,000

Book value of interest acquired :
Ordinary Share Capital (P100,000 x 80%) P 80,000
Retained Earnings (P50,000 x 80%) 40,000 120,000
Excess of cost over book value P160,000
Allocation of excess:
Plant and equipment P 50,000
Inventory 20,000 70,000x 80% 56,000
Goodwill P104,000
Expenses on the adjustment
2014 2015
Plant and equipment (P50,000/5 yrs.) P10,000 P10,000
Goodwill impairment 5,000 4,000
Inventories 20,000 ---__
Total P35,000 P14,000

2. Working paper elimination entries:

2014 a. Ordinary Share Capital, Slow Co. 100,000
Retained Earnings, Slow Co. 50,000
Chapter 3 AA2 (2014 edition) page 5

Inventories 20,000
Plant and Equipment 50,000
Goodwill 104,000
Investment in Slow Co. 280,000
Non-controlling Interest 44,000
100,000 +50,000+50,000+20,000 x 20% = 44,000

c. Cost of Sales 20,000

Operating Expenses 15,000
Plant and Equipment 10,000
Goodwill 5,000
Inventory 20,000

2015 a. Ordinary Share Capital, Slow Co. 100,000

Retained Earnings, Slow Co. 50,000
Inventory 20,000
Plant and Equipment 50,000
Goodwill 104,000
Investment in Slow Co. 280,000
Non-controlling Interest 44,000

b. Retained Earnings, Plow Co. 35,000

Operating Expenses 14,000
Plant and Equipment 20,000
Inventory 20,000
Goodwill 9,000

3. Computation of consolidated net income

2014 2015
Net income from own operations:
Plow Co. P70,000 P 80,000
Slow Co. 60,000 50,000
Impairment / depreciation / amortization ( 35,000) ( 14,000)
Consolidated net income P95,000 P 116,000

Problem 3 - 2
Consideration transferred P2,280,000
Book value of interest acquired:
Ordinary Share Capital (P1,000,000 x 80%) P 800,000
Retained Earnings (P1,600,000 x 80%) 1,280,000 2,080,000
Goodwill P 200,000

Peach Co. and Subsidiary Silver Co.

Consolidated Working Paper
For the Year Ended December 31, 2014
Adj. and Eliminations Non-cont Consolidated
Peach Co. Silver Co. Debit Credit Interest St. of FP
Income Statement
Chapter 3 AA2 (2014 edition) page 6

Sales 4,000,000 2,000,000 6,000,000

Cost of sales 1,600,000 1,200,000 2,800,000
Gross profit 2,400,000 800,000 3,200,000
Operating expenses 1,560,000 440,000 c. 10,000 2,010,000
Operating income 840,000 360,000 1,190,000
Non-cont. interest NI 72,000 72,000
NI-carried forward 840,000 360,000 72,000 1,118,000
Retained Earnings St.
Bal. January 1 6,000,000 1,600,000 b. 1,600,000 6,000,000
NI brought forward 840,000 360,000 72,000 1,118,000
Dividend fr. Subsidiary 96,000 a. 96,000
Total 6,936,000 1,960,000 72,000 7,118,000
Less Div. declared 800,000 120,000 a. 96,000 24,000 800,000
Balance, Dec. 31 6,136,000 1,840,000 48,000 6,318,000
St. of Financial Position
Cash 600,000 200,000 800,000
Accounts Receivable 400,000 400,000 d. 10,000 790,000
Inventories 800,000 600,000 1,400,000
Land 1,200,000 1,200,000
Building (net of AD) 800,000 800,000
Equipment (net of AD) 2,456,000 2,000,000 4,456,000
Inv. in Silver Co. 2,280,000 b. 2,280,000
Goodwill b. 200,000 c. 10,000 190,000
Total 8,536,000 3,200,000 9,636,000
AP and accrued exp. 604,000 360,000 d. 10,000 954,000
Bonds payable 196,000 196,000
OS - Peach Co. P100 par 1,000,000 1,000,000
OS - Silver Co. P20 par 1,000,000 b. 1,000,000
APIC 600,000 600,000
RE-brought forward 6,136,000 1,840,000 48,000 6,318,000
Non-cont. Interest b. 520,000 520,000 568,000
Total 8,536,000 3,200,000 2,916,000 2,916,000 568,000 9,636,000

Peach Co. and Subsidiary Silver Co.

Consolidated Income Statement
For the Year Ended December 31, 2014

Sales P6,000,000
Cost of Sales 2,800,000
Gross Profit P3,200,000
Operating Expenses 2,010,000
Consolidated Net Income P1,190,000
Non-controlling Interest net income P 72,000
Net Income Attributable to Peach Co. P1,118,000

Peach Co. and Subsidiary Silver Co.

Consolidated Statement of Financial Position
December 31, 2014
Chapter 3 AA2 (2014 edition) page 7

Assets
Cash P 800,000
Accounts Receivable 790,000
Inventories 1,400,000
Land 1,200,000
Building (net of accumulated depreciation) 800,000
Equipment (net of accumulated depreciation) 4,456,000
Goodwill 190,000
Total Assets P9,636,000
Liabilities and Shareholders Equity

Accounts Payable and Accrued Expenses P 954,000

Bonds Payable (face amount - P200,000) 196,000
Ordinary Share Capital, P100 par 1,000,000
Additional Paid-in Capital 600,000
Retained Earnings 6,318,000
Non-controlling Interest 568,000
Total Liabilities and Shareholders Equity P9,636,000

Problem 3 3
Requirement No. 1
Consideration transferred P1,512,000
Book value of interest acquired:
1,400,000 x 80% 1,120,000
Excess of cost over book value of acquired investment P 392,000
Allocation of excess:
Inventories P 60,000
Land 100,000
Building 200,000
Equipment (150,000)
Patent 80,000 290,000 x 80% 232,000
Goodwill P 160,000

Requirement No. 2
Prose Co. and Subsidiary Slope Co.
Consolidated Working Paper
For the Year Ended December 31, 2014

Prose Slope Adj. & Eliminations IS Non-cont Consolidated

Debits Co. Co. Debit Credit Dr. (Cr.) Interest St. of FP
Cash 400,000 200,000 600,000
Accounts Receivable
300,000 100,000 400,000
Inventories 200,000 80,000 b. 60,000 c. 60,000 280,000
Land 300,000 b. 100,000 400,000
Buildings 520,000 b. 260,000 780,000
Equipment 1,400,000 940,000 b. 156,670 2,183,330
Inv. in Slope Co. 1,512,000 b. 1,512,000
Cost of sales 800,000 300,000 c. 60,000 1,160,000
Expenses 720,000 400,000 c. 8,000 1,238,000
d. 110,000
Chapter 3 AA2 (2014 edition) page 8

Dividends paid 200,000 100,000 a. 80,000 (20,000) 200,000

Patents b. 80,000 c. 8,000 72,000
Goodwill b. 160,000 c. 5,000 155,000
5,532,000 2,940,000 5,070,330
Credits
AP & accrued exp. 248,000 380,000 628,000
AD - Bldg. 120,000 b. 60,000 210,000
c. 10,000
d. 20,000
AD - Equipt. 804,000 40,000 b. 6,670 d. 90,000 912,330
c. 15,000
OS - P100 par 400,000 400,000
OS - P20 par 600,000 b. 600,000
APIC 800,000 800,000
RE - Prose Co. 1,200,000 1,200,000
RE - Slope Co. 800,000 b. 800,000
Sales 2,000,000 1,000,000 (3,000,000)
Dividend fr. Sub 80,000 a. 80,000
NCI Net Income 47,400 47,400
NI attr. to Prose 554,600 554,600
Non-cont. Int. b. 338,000 338,000 365,400
Totals 5,637,600 2,940,000 2,339,670 2,339,670 5,070,000
NCI 600,000 + 800,000+290,000 x 20% = 338,000

Charges to expense for asset adjustments:

Inventories P60,000
Building 10,000
Equipment ( 15,000)
Patent 8,000
Goodwill 5,000
Total P68,000
Adjustments to Building and equipment:
Building (increase is 50%)
Cost (P520,000 x 50% ) P260,000
AD (P120,000 x 50% ) 60,000
Net amount P200,000

Equipment (decrease is 16.67%)

Cost (P940,000 x 16.67% ) P156,670
AD (P 40,000 x 16.67%) 6,670
Net amount P150,000

Current year depreciation based on book value:

Building = (P520,000 P120,000) / 20 yrs. = P20,000
Equipment = (P940,000 P40,000) / 10 yrs. = P90,000

Requirement No. 3
Prose Co. and Subsidiary Slope Co.
Consolidated Income Statement
For the Year Ended December 31, 2014
Chapter 3 AA2 (2014 edition) page 9

Sales P3,000,000
Cost of sales 1,160,000
Gross Profit P1,840,000
Expenses 1,238,000
Consolidated Net Income P 602,000
Non-controlling Interest net income P 47,400
Net Income Attributable to Prose P 554,600

Prose Co. and Subsidiary Slope Co.

Consolidated Statement of Financial Position
December 31, 2014
Assets
Cash P 600,000
Accounts Receivable 400,000
Inventories 280,000
Land 400,000
Buildings P 780,000
Less Accumulated Depreciation 210,000 570,000
Equipment P2,183,330
Less Accumulated Depreciation 912,330 1,271,000
Patents 72,000
Goodwill 155,000
Total Assets P3,748,000
Liabilities and Shareholders Equity
Accounts Payable and Accrued Expenses P628,000
Ordinary Share Capital, P100 par 400,000
Additional Paid-in Capital 800,000
Retained Earnings (P1,200,000 + P554,600 - P200,000) 1,554,600
Non-controlling Interest 365,400
Total Liabilities and Shareholders Equity P3,748,000

Problem 3 - 4
1. a. Notes Payable - Palma Corp. 10,000
Notes Receivable - Salman Co. 10,000

b. Accrued Interest on Notes Payable 600

Accrued Interest on Notes Receivable 600

2. Sales P 70,000
Interest revenue 600
Expenses ( 53,000)
Interest expense ( 600)
Consolidated Net income P 17,000
Non-controlling Interest net income [(P20,000 - P17,000 - P600) x 10%] ( 240)
Net income attributable to Palma Corp. P 16,760

Problem 3 5
1. Non-controlling interest net income (400,000-240,000-60,000 x 20%) P 20,000

2. Consolidated net income 800,000+400,000-500,000-240,000-100,000-60,000-6,000 P294,000

3. Current assets of Pentium and Stadium P470,000

Chapter 3 AA2 (2014 edition) page 10

Less Dividends receivable (P20,000 x 80%) 16,000

Current assets P454,000

4. Consideration transferred P560,000

Book value of interest acquired 500,000 x 80% 400,000
Goodwill P160,000

5. None, since the dividend revenue received from Stadium is closed to RE.

6. Beginning retained earnings of Pentium P260,000

Net income attributable to parent 294,000 -20,000 274,000
Pentium dividends for 2015 (120,000)
Consolidated retained earnings at December 31, 2015 P414,000

7. P1,000,000 the share capital of Pentium.

8. 600,000+100,000-50,000 x 20% P130,000

9. None, since the investment account is eliminated.

10. Goodwill P160,000

Less impairment loss for 2014 and 2015 16,000
Goodwill as of December 31, 2015 P144,000

MULTIPLE CHOICE
Change 3-A No. 20 from 30% to 70%
3-A 1. C 5. C 9. A 13. B 17. B
2. B 6. A 10. C 14. D 18. C
3. B 7. C 11. D 15. B 19. B
4. A 8. A 12. C 16. C 20. A

3-B 1. B Consideration transferred P290,000

Excess of BV over cost 14,000
BV of interest acquired P304,000

2. A P58,400 20% P292,000

3. B Consolidated working capital (P726,000 P300,000) P426,000

Poles working capital (P436,000 P166,000) 270,000
Soles working capital P156,000

3-C A Net income from own operations of Parker Co.100,000 - 8,500 P 91,500
Starter Co. net income 40,000
Consolidated net income P131,500

3-D 1. D Net income from own operations of Pentium

(P1,000,000 - P600,000 - P180,000) P220,000
Systems NI [P600,000 - P400,000 - P100,000] 100,000
Depreciation of excess of cost over BV of investment
Chapter 3 AA2 (2014 edition) page 11

(P416,000 - P400,000) / 80%/10 years ( 2,000)

Consolidated net income P 318,000

3-E 1. C 60,000-50,000+36,000 x 80% P 36,800

2. B Consideration transferred P756,000

Liquidating Dividends
(P60,000 + P36,000 P50,000 P50,000) x 80% 3,200
Investment balance, December 31, 2015 P752,800

3-F B 60,000 x 10% P 6,000

3-G Consideration transferred, Jan. 1, 2011 P820,000

Book value of interest acquired (P800,000 x 80%) 640,000
Excess of cost over BV P180,000

Equipment with 10-year life (P180,000 / 80% = 225,000/10 = 22,500

1. D RE Singson, Dec. 31, 2013 P400,000
RE Singson, Jan. 1, 2011 ( 200,000)
Depreciation on the excess allocated to equipment
P225,000 / 10 years x 3 years (67,500)
Net increase in Retained Earnings of Singson P132,500
Pingsons share on the increase X 80%
Amount needed to convert the investment to equity basis P106,000
2. B Pingsons separate net income P500,000
Singsons net income 160,000 22,500 137,500
Consolidated net income P637,500

3. B Shareholders equity of Singson, January 1, 2014 P1,000,000

Net income for 2014 160,000
Dividends for 2014 ( 100,000)
Adjustment in assets 225,000
Depreciation 22,500 x 4 ( 90,000)
Shareholders equity of Singson, December 31, 2014 P1,195,000
Non-controlling interest percentage x 20%
Non-controlling interest, December 31, 2014 P 239,000

4. B P 100,000 x 20% P 20,000

3-H C Total shareholders equity on acquisition P250,000

Net Income 60,000
Dividends P2,000 x 20 (40,000)
Adjustment in Plant assets P208,500 P187,500 = P21,000/75% 28,000
Differential Adjustment for Depreciation P28,000/10 ( 2,800)
Total shareholders equity December 31, 2014 P295,200
x 25%
Non-controlling interest P 73,800

3-I A Zero, eliminated

3-J 1. A TSE of Saddle Co., Jan. 1, 2014 (P70,000 / 20%) P350,000

Cumulative net income for 5 years ( 200,000)
Chapter 3 AA2 (2014 edition) page 12

Dividends paid 50,000

TSE of Saddle Co., Jan. 1, 2009 P200,000
Percentage of interest of Paddle x 80%
Book value of acquired investment P160,000
Excess of cost over book value of net assets 50,000
Consideration transferred P210,000

2. A 50,000 12,500 P 37,500

3-K 1. C Ordinary Share Capital (P75,000 x 90%) P 67,500

Retained earnings (P45,000 x 90%) 40,500
Book value of Slogan shares P108,000

2. C Consideration transferred P110,700

Book value of interest acquired 108,000
Excess of cost over book value P 2,700/
90%
P 3,000

3. C P4,500 x 90% P 4,050

Change 3-K No. 4 choice B to P199,200

4. B Retained earnings, January 1 P180,000
Net income from own operations 45,000
Share in subsidiary income (P 4,500 300) 4,200
Dividends declared and paid ( 30,000)
Consolidated RE (RE of parent), December 31, 2014 P199,200

3-L B Consideration transferred P 800,000

Book value of interest acquired 900,000 x 80% 720,000
Goodwill P 80,000
300,000 + (100,000 x 80%) 4,000 = P376,000

3-M 1. B 80,000 -10,000 = 70,000 +35,000 5,000 P 100,000

2. C Total assets of Par P 1,110,000

Total assets of Sub 350,000
Total P 1,460,000
Adjustments and eliminations:
Investment in Sub ( 300,000)
Excess of cost over BV of investment:
Cost P300,000
Book value (OS P30,000; APIC -
P100,000; RE P115,000) 245,000
Goodwill P 55,000
Less Impairment loss 5,000 50,000
Consolidated total assets P1,210,000

3. A Retained earnings of parent company

Chapter 3 AA2 (2014 edition) page 13

4. C P55,000 P5,000 P 50,000

5. A Total Stockholders equity of parent company P980,000

3-N C TSE of Polo before the combination P 6,000,000

FMV of OS issued by Polo (200,000 x P20) 4,000,000
Net income of Polo and Solo 1,550,000
Impairment loss ( 100,000)
Dividends paid by Polo ( 450,000)
Consolidated shareholders equity, Dec. 31, 2014 P 11,000,000

3-O B P3,000,000 X 7/10 = P2,100,000

3-P D Preston Expenses P 1,242,000

Seldon Expenses P 1,428,000
Differential adjustment:
(P800,000 P660,000)/10 14,000 1,442,000
Consolidated Total Expenses P 2,684,000

3-Q 1. A P 6,500,000 + 630,000 @ 5 P 9,650,000

2. B P 4,400,000 + 630,000 @ 3 P 6,290,000

3. A Retained Earnings of Post

4. D Net income of Post (P 1,000,000 + P 1,100,000) P 2,100,000

Adjusted Net income of Shaw:
Net income P 500,000
Impairment loss on goodwill 5,100 494,900
P 2,594,900
5. B [(P9,000,000 + 300,000 + 500,000 350,000) P 9,450,000
X 40%
P3,780,000

3-R 1. A P1,000,000
2. A P1,000,000

3. A P120,000 x 80% = P96,000

4. C Subsidiary net income P240,000

Differential adjustment P60,000 + P80,000/10 14,000
P226,000
x 20%
P 45,200

5. D Ordinary share capital P 600,000

Retained earnings Jan 1, 2013 P400,000
Net income P200,000 + P240,000 + P260,000 700,000
Dividends P80,000 + P100,000 + P120,000 (300,000) 800,000
Book value P1,400,000
Adjustment of Equipment and Building to fair value 140,000
Addl depreciation P140,000/10 = P14,000 x 3 (42,000)
Chapter 3 AA2 (2014 edition) page 14

Goodwill P1,000,000/80% - P1,000,000 P140,000 110,000

P1,608,000
x 20%
Non-controlling interest P 321,600

3-S D Let x = Net income of Port

x = P84,080 + .70 of NI of Sort
NI of Sort = (P12,000) + .20x

x = P84,080 + .70 [(P12,000) + .20x]

x = P84,080 - P8,400 + .14x
x = P75,680 + .14x
x = P75,680/.86
x = P88,000

3-T B 2,000,000 800,000 x 80% P960,000

3-U A 3,600,000 x 25% P900,000

3-V 1. B Net income from own operation:

Peter Corp. P600,000
Seller Co. P1,000,000 P800,000 200,000
Amortization (12,000)
Consolidated net income P788,000
Non-controlling interest net income:
200,000 x 3/12 x 30% P15,000
200,000 x 9/12 x 20% 30,000
Differential adjustment:
P12,000 x 3/12 x 30% (900)
P12,000 x 9/12 x 20% (1,800) 42,300
Consolidated net income attributable to controlling int. P745,700

2. D