Darlene Company acquires 80% of Juanito Company for P250,000 on January 1, 2010. Juanito reported common stock of P150,000 and retained earnings of P100,000 on that date. Equipment was undervalued by P15,000 and buildings were undervalued by P20,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Juanito earn income and pays dividends as follows: 2010 2011 2012 Net income P 50,000 P 60,000 P 65,000 Dividends 20,000 25,000 30,000 Assume the initial value method (or cost method) is applied. 5.) Compute Darlene’s Investment in Juanito at December 31, 2010. A. P250,000 B.P271,200 C.P287,200 D.P312,500 6.) Using the same information above, compute Darlene’s Investment in Juanito at December 31, 2012? A. A. A. A. P338,000 B. P312,500 C. P296,200 D. P250,000 7.) Using the same information above, how much does Darlene report as Income from Juanito / Dividend Income for the year ended December 31, 2012? A. P24,000 B. P25,200 C. P28,000 D. P49,200 8.) Using the same information above, compute the non-controlling interest in the net income of Juanito at December 31, 2011? A. P 7,000 B.P 9,200 C. P11,300 D. P12,000 9.) Using the same information above, compute the non-controlling interest of Juanito using full- goodwill method at December 31, 2012? A. P 80,000 B. P 53,900 C. P 70,000 D.P 80,400
Darlene Company acquires 80% of Juanito Company for P250,000 on January 1, 2010. Juanito reported common stock of P150,000 and
Juanito earn income and pays dividends as follows:
2010 2011 2012
Net income P 50,000 P 60,000 P 65,000
Dividends 20,000 25,000 30,000
Assume the initial value method (or cost method) is applied.
5.) Compute Darlene’s Investment in Juanito at December 31, 2010.
A. P250,000
B.P271,200
C.P287,200
D.P312,500
6.) Using the same information above, compute Darlene’s Investment in Juanito at December 31, 2012? A. A. A. A. P338,000
B. P312,500
C. P296,200
D. P250,000
7.) Using the same information above, how much does Darlene report as Income from Juanito / Dividend Income for the year ended December 31, 2012?
A. P24,000
B. P25,200
C. P28,000
D. P49,200
8.) Using the same information above, compute the non-controlling interest in the net income of Juanito at
December 31, 2011?
A. P 7,000
B.P 9,200
C. P11,300
D. P12,000
9.) Using the same information above, compute the non-controlling interest of Juanito using full-
goodwill method at December 31, 2012?
A. P 80,000
B. P 53,900
C. P 70,000
D.P 80,400
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