For the year ended December 31, the following results were given: Dividend Paid Net IncomeParent Company P15,000 P30,200Subsidiary Company 4,000 9,400Using the proportionate basis or partial goodwill method, compute the profit attributable to equity holders of parent (or controlling interestin consolidated net income) on December 31:A. P 26,600 C. P 36,000B. P32,090 D. P 44,100 On January 1, Parent Company acquired 90% of Subsidiary Company in exchange for 5,400 shares of P10 parcommon stock having a market value of P120,600. Parent and Subsidiary condensed balance sheet on January 1,were as follows: ParentSubsidiaryCompanyP 37,400AssetsCompanyP 36,90034,200CashAccounts receivable, net9,100Inventories22,900Equipment, netPatents16,10040,00010.000179,000P 267,000P112,600Total AssetsLiabilities and EquitiesAccounts PayableBonds PayableCommon stock, P10 parShare PremiumP 4,000P6,600100,000100,00015,00048 000P 267,00050,00015,000RetainedeamingsTotal Liabilities and Equities41,000P112,600At the date of acquisition, all assets and liabilities of Subsidiary Company have book value approximately equal totheir respective market values except the following asdetemined by appraisalas follows:P 17,100Inventories (FIFO method)Equipment (net-remaining life 4 years)Patents (rema ining life 10 years)48,00013,000

For year ended 31.12., Net income of parent company = P30200 Dividend paid = P15000 Net income after…

Answered: For the year ended December 31, the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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For the year ended December 31, the following results were given:

Dividend Paid Net Income

Parent Company P15,000 P30,200
Subsidiary Company 4,000 9,400

Using the proportionate basis or partial goodwill method, compute the profit attributable to equity holders of parent (or controlling interest
in consolidated net income) on December 31:
A. P 26,600 C. P 36,000
B. P32,090 D. P 44,100

On January 1, Parent Company acquired 90% of Subsidiary Company in exchange for 5,400 shares of P10 par
common stock having a market value of P120,600. Parent and Subsidiary condensed balance sheet on January 1,
were as follows:

Parent
Subsidiary
Company
P 37,400
Assets
Company
P 36,900
34,200
Cash
Accounts receivable, net
9,100
Inventories
22,900
Equipment, net
Patents
16,100
40,000
10.000
179,000
P 267,000
P112,600
Total Assets
Liabilities and Equities
Accounts Payable
Bonds Payable
Common stock, P10 par
Share Premium
P 4,000
P6,600
100,000
100,000
15,000
48 000
P 267,000
50,000
15,000
Retainedeamings
Total Liabilities and Equities
41,000
P112,600
At the date of acquisition, all assets and liabilities of Subsidiary Company have book value approximately equal to
their respective market values except the following asdetemined by appraisalas follows:
P 17,100
Inventories (FIFO method)
Equipment (net-remaining life 4 years)
Patents (rema ining life 10 years)
48,000
13,000

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