LGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by paying cash. The consolidated statement of financial position showed the following balances at the date of acquisition. Consolidated Balances Amount Total Assets 15,670,000 4,575,000 Total Liabilities Total Shareholder's Equity The book value of the net assets of NS Services Center is P4,500,000. The assets of NS Service Center are fairly valued except for the following: Patent on the product that is deemed worthless, P50,000. Goodwill of P150,000. Unrecognized identifiable R&D of P75,000. The fair value of the non-controlling interest is 705,000 and the book value of LGM's equity balance is P9,500,000. On December 31, 2022 the following information were provided by NS Services Center: Net income of 400,000 was recognized. Patents remaining useful life is 4 years. Pre-existing goodwill presented above was impaired with a current value of 120,000. Dividends were declared amounting to P100,000. LGM Motors recognized net income amounting to P650,000 on December 31, 2022.

LGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by paying cash. The consolidated statement of financial position showed the following balances at the date of acquisition. Consolidated Balances Amount Total Assets 15,670,000 4,575,000 Total Liabilities Total Shareholder's Equity The book value of the net assets of NS Services Center is P4,500,000. The assets of NS Service Center are fairly valued except for the following: Patent on the product that is deemed worthless, P50,000. Goodwill of P150,000. Unrecognized identifiable R&D of P75,000. The fair value of the non-controlling interest is 705,000 and the book value of LGM's equity balance is P9,500,000. On December 31, 2022 the following information were provided by NS Services Center: Net income of 400,000 was recognized. Patents remaining useful life is 4 years. Pre-existing goodwill presented above was impaired with a current value of 120,000. Dividends were declared amounting to P100,000. LGM Motors recognized net income amounting to P650,000 on December 31, 2022.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

How much is the Consolidated Shareholder's Equity on December 31, 2022?

LGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by paying
cash. The consolidated statement of financial position showed the following balances at the
date of acquisition.
Consolidated Balances
Amount
Total Assets
15,670,000
4,575,000
Total Liabilities
Total Shareholder's Equity
The book value of the net assets of NS Services Center is P4,500,000. The assets of NS Service
Center are fairly valued except for the following:
Patent on the product that is deemed worthless, P50,000.
Goodwill of P150,000.
Unrecognized identifiable R&D of P75,000.
The fair value of the non-controlling interest is 705,000 and the book value of LGM's equity
balance is P9,500,000.
On December 31, 2022 the following information were provided by NS Services Center:
Net income of 400,000 was recognized.
Patents remaining useful life is 4 years.
Pre-existing goodwill presented above was impaired with a current value of 120,000.
Dividends were declared amounting to P100,000.
LGM Motors recognized net income amounting to P650,000 on December 31, 2022.

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