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Ci - Cni/ Nci-Cni Cni/Group Ni

The document discusses the acquisition of a 90% interest in a subsidiary (SHE-S) by a parent company. Key details include: 1) The parent paid P120,600 for 5,400 shares of the subsidiary, resulting in P25,200 of excess consideration over the book value of the subsidiary's net assets. 2) P14,400 of the excess was allocated to goodwill, with the remaining P10,800 allocated to increases in the fair values of inventory, equipment, and patents. 3) At acquisition, the non-controlling interest (NCI) in the subsidiary's net assets was calculated to be P11,800.

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Mark Calapatan
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53 views2 pages

Ci - Cni/ Nci-Cni Cni/Group Ni

The document discusses the acquisition of a 90% interest in a subsidiary (SHE-S) by a parent company. Key details include: 1) The parent paid P120,600 for 5,400 shares of the subsidiary, resulting in P25,200 of excess consideration over the book value of the subsidiary's net assets. 2) P14,400 of the excess was allocated to goodwill, with the remaining P10,800 allocated to increases in the fair values of inventory, equipment, and patents. 3) At acquisition, the non-controlling interest (NCI) in the subsidiary's net assets was calculated to be P11,800.

Uploaded by

Mark Calapatan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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51.

c
Fair Value of Subsidiary:
Consideration Transferred (5,400 shares) P120,600
Less: Book value of SHE-S, 1/1:
Common stock – S: P50,000 x 90% P 45,000
APIC – S: P15,000 x 90% 13,500
RE – S: P41,000 x 90% 36,900 95,400
Allocated Excess P 25,200
Less: Over/undervaluation of A & L:
Increase in Inv. (P17,100–P16,100) x 90% P 900
Increase in Eqpt. (P48,000–P40,000) x 90% 7,200
Increase in Patents (P13,000–P10,000) x 90% 2,700 10,800
Positive Excess: Goodwill P 14,400
Amortization of allocated excess - Starting January 1:
Inventory: P1,000 / 1 year P 1,000
Equipment: P8,000 / 4 years 2,000
Patents: P3,000 / 10 years 300
P 3,300
52. c
Common stock – S P 50,000
APIC – S 15,000
RE – S P 41,000
Stockholders’ equity – Subsidiary, 1/1 P106,000
Add: Adjustments to reflect fair value 12,000
Fair value of Stockholders’ Equity – S, 1/1 P118,000
x: Non-controlling) interests 10%
Non-controlling Interests (in net assets) P 11,800

53. a – P48,000, parent only.

54. a – P48,000. On the date of acquisition, the parent’s retained earnings is


also the consolidated retained earnings.

55. No requirement.

56. b – P4,000 x 90% = P3,600


57. c - use also the traditional formula presented in the book
Parent Subsidiary Consolidated
Net Income from own operations:
P: [P30,200 – (P4,000 x 90%) P 26,600
S (90% : 10%) 8,460 P 940
Amort.of Allocated Excess (90%:10%) ( 2,970) ( 330)
Impairment – partial goodwill ( 0) _____
P 32,090 P 610 P32,700
CI – CNI/ NCI-CNI CNI/Group NI
Profit Attributable
to Equity Holders
of Parent
58. c
Noncontrolling Interests (in net assets):
Common stock - S, 12/31 P 50,000
Additional paid-in capital - S, 12/31
15,000
Retained earnings - S, 12/31:
RE-S, 1/1 P 41,000
Add: NI-S, 9,400
Less: Dividends – S 4,000 46,400
Book value of SHE - S, 12/31 P 111,400
Add: Adjustments to reflect fair value, 1/1/ 12,000
Less: Amortization of allocated excess (1 yr.) 3,300
Fair Value of Net Assets/SHE - S, 12/31/ P 120,100

x: Noncontrolling Interest % 10%


Noncontrolling Interest (in net assets), 12/31/ P 12,010

59. b – refer to 57 for computation


60. c – refer to 57 for computation
61. b
Controlling RE / RE Attributable
to EH of Parent, 1/1/ (refer to No. 53 P 48,000
Add: CI – CNI (refer to 57 or 59) 32,090
Less: CI – Dividends (Dividend of parent only) 15,000
Controlling RE / RE Attributable
to EH of Parent, 12/31/ P 65,090
62. b – same with No. 61.
63. c
Consolidated Equity:
Controlling Interest / Equity Holders
Attributable to Parent:
Common stock – P: [P100,000 + P120,600 –
(5,400 shares x P10 par)] P154,000
APIC – P: [15,000 + [P120,600 – (5,400 x P10)] 81,600
RE – P (refer to No. 61) 65,090
Parent’s Stockholders Equity or
Controlling Interest – Equity P300,690
Noncontrolling Interest (refer to No. 58) 12,010
Consolidated Equity P312,700

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