On January 1, 2022, Sun Company acquired 85% of outstanding shares of Moon Corp. The consideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shares with a market price of P45 per share. The book value of Moon Corp.’s identifiable net assets approximate its fair value, except for the following: Merchandise inventory’s fair value is lower than the book balance by 150,000. Equipment-A, with 2 years remaining useful life, costing P300,000 is understated by P50,000. Land with a fair value of P500,000 is recognized in the books amounting to P350,000. The following events happened to Moon Corp. Equipment-A was sold in June 30, 2023 for P320,000. 60% of merchandise inventory were sold in 2022. There is no movement as to the ordinary shares of Moon Corp during the year. The unadjusted trial balance as of December 31, 2022 were as follows: Sun Company Moon Corp Cash 2,240,000 1,800,000 Trade Receivables 1,000,000 960,000 Merchandise Inventory 2,320,000 740,000 Furniture, net 820,000 540,000 Equipment, net 1,540,000 660,000 Land 880,000 3,000,000 Trademark, net 60,000 240,000 Investment in Luna 4,250,000 Cost of Good Sold 5,500,000 3,840,000 Expenses 3,240,000 1,620,000 Dividends Declared 1,280,000 1,920,000 TOTAL 23,130,000 15,320,000 Liabilities 1,570,000 1,700,000 Ordinary shares 3,600,000 2,700,000 Retained Earnings 1/02/22 5,200,000 1,860,000 Sales 10,730,000 7,940,000 Gain on sale of furniture 50,000 120,000 Dividend Income 1,980,000 1,000,000 TOTAL 23,130,000 15,320,000 Goodwill, if any, is impaired by 100,000 in 2022. 1. How much is the consolidated net income attributable to parent in December 31, 2022? a. 5,397,000 b. 5,428,875 c. 5,418,250 d. 5,386,375 2. How much is the consolidated net income attributable to non-controlling interest In December 31, 2022? a. 531,000 b. 536,625 c. 529,125 d. 534,750 3. How much is the consolidated shareholder’s equity as of December 31, 2022? a. 12,938,250 b. 13,935,000 c. 10,335,000 d. 15,215,000
On January 1, 2022, Sun Company acquired 85% of outstanding shares of Moon Corp. The consideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shares with a market price of P45 per share.
The book value of Moon Corp.’s identifiable net assets approximate its fair value, except for the following:
- Merchandise inventory’s fair value is lower than the book balance by 150,000.
- Equipment-A, with 2 years remaining useful life, costing P300,000 is understated by P50,000.
- Land with a fair value of P500,000 is recognized in the books amounting to P350,000.
The following events happened to Moon Corp.
- Equipment-A was sold in June 30, 2023 for P320,000.
- 60% of merchandise inventory were sold in 2022.
- There is no movement as to the ordinary shares of Moon Corp during the year.
The unadjusted
|
|
Sun Company |
Moon Corp |
|
Cash |
2,240,000 |
1,800,000 |
|
Trade Receivables |
1,000,000 |
960,000 |
|
Merchandise Inventory |
2,320,000 |
740,000 |
|
Furniture, net |
820,000 |
540,000 |
|
Equipment, net |
1,540,000 |
660,000 |
|
Land |
880,000 |
3,000,000 |
|
Trademark, net |
60,000 |
240,000 |
|
Investment in Luna |
4,250,000 |
|
|
Cost of Good Sold |
5,500,000 |
3,840,000 |
|
Expenses |
3,240,000 |
1,620,000 |
|
Dividends Declared |
1,280,000 |
1,920,000 |
|
TOTAL |
23,130,000 |
15,320,000 |
|
Liabilities |
1,570,000 |
1,700,000 |
|
Ordinary shares |
3,600,000 |
2,700,000 |
|
|
5,200,000 |
1,860,000 |
|
Sales |
10,730,000 |
7,940,000 |
|
Gain on sale of furniture |
50,000 |
120,000 |
|
Dividend Income |
1,980,000 |
1,000,000 |
|
TOTAL |
23,130,000 |
15,320,000 |
1. How much is the consolidated net income attributable to parent in December 31, 2022?
a. 5,397,000
b. 5,428,875
c. 5,418,250
d. 5,386,375
2. How much is the consolidated net income attributable to non-controlling interest In December 31, 2022?
a. 531,000
b. 536,625
c. 529,125
d. 534,750
3. How much is the consolidated shareholder’s equity as of December 31, 2022?
a. 12,938,250
b. 13,935,000
c. 10,335,000
d. 15,215,000
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