January 1, 2022, ABC Company purchased 70% of ordinary shares of XYZ Company at a price of P3,000,000. On January 1, 2022, ABC reported retained earnings in the amount of P10,000,000. As of this said date, the total assets of XYZ Company are P6,500,000 while its total liabilities amounted to P1,000,000. All of the assets and liabilities of XYZ are properly valued except for a building with a remaining life of 10 years with carrying value of P1,500,000 and fair value of P1,000,000. On April 1, 2022, ABC sold inventories at a price of P200,000 to XYZ at a mark-up of 25% based on cost. On July 1, 2022, XYZ sold a machinery to ABC at a price of P880,000, when its book value is still P1,000,000 on this date. As of this date, the said machinery has remaining life of 3 As of Do mber 21 2022

January 1, 2022, ABC Company purchased 70% of ordinary shares of XYZ Company at a price of P3,000,000. On January 1, 2022, ABC reported retained earnings in the amount of P10,000,000. As of this said date, the total assets of XYZ Company are P6,500,000 while its total liabilities amounted to P1,000,000. All of the assets and liabilities of XYZ are properly valued except for a building with a remaining life of 10 years with carrying value of P1,500,000 and fair value of P1,000,000. On April 1, 2022, ABC sold inventories at a price of P200,000 to XYZ at a mark-up of 25% based on cost. On July 1, 2022, XYZ sold a machinery to ABC at a price of P880,000, when its book value is still P1,000,000 on this date. As of this date, the said machinery has remaining life of 3 As of Do mber 21 2022

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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On January 1, 2021, ABC purchased 90% of the outstanding shares of JKL Company at a cost of P1,632,000. On that date, JKL had P1,020,000 worth of outstanding shares and P1,020,000 worth of accumulated profits. For 2021, ABC Company had income of P571,200 from its own operations and paid dividends of P306,000. For 2021, JKL Company reported income of 132,600 and paid dividends of P61,200. All of the assets and liabilities of JKL have book values equal to their market values. On January 1, 2021, ABC sold equipment to JKL for P204,000. The book value of the equipment on that date was P244,800. The loss of P40,800 is reflected in the income of ABC indicated above. The equipment is expected to have a useful life of five years from the date of sale. In the December 21, 2021 consolidated statement of financial position, what will be the net income attributable to equity holders of ABC?
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On January 1, 2022, Pet Company purchased 80% of the shares of Sam Company for P1,000,000. The shareholders' equity of Sam Company on that date showed: Ordinary Shares - P570,000 and Retained Earnings - P490,000. Non-controlling interest is initially measured at proportionate share of subsidiary's net assets.On April 30, 2022, Pet acquired used machinery for P84,000 from Sam that was being carried in the latter's books at P105,000. The asset still has a remaining useful life of 5 years. On the other hand, on August 31, 2022, Sam purchased an equipment that was already 20% depreciated from Pet for P345,000. The original cost of this equipment was P375,000 and had a remaining life of 8 years.Net income of Pet Company and Sam Company for 2022 amounted to P360,000 and P155,000. Dividends paid totaled to P115,000 and P52,500 for Pet and Sam, respectively.Required:On the consolidated financial statements in 2022, how much would be the Net income attributable to parents' shareholders'…
On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits. For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value. On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date. For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company. Compute the profit attributable to the equity holders of the parent.
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On January 3, 2022, P Company acquired 70% interest in S Company for P4,200,000. Consideration includes issuance of shares with fair value of P3,500,000 and cash for the balance. On this date, the equity of P and S Company are as follows: P Company S Company Ordinary Share Capital 3,300,000 1,450,000 Accumulated Profits 5,450,000 2,800,000 Non-controlling interest is initially measured at fair value of P1,675,000. Fair value of the following assets of S Company exceeded their book values: Inventories, P150,000; Fixed assets (remaining life – 5 years), P600,000. All other assets and liabilities are fairly valued. Towards the end of the year, P sold to S merchandise costing P150,000 at 40% gross profit, 25% of these inventories was unsold as of balance sheet date. Also, P purchased inventory from S amounting to P250,000 which includes mark-up of 20% based on cost. P sold to outsider 30% of these inventories during 2022. Goodwill is impaired by P225,000. P…
On January 2, 2022, Parent Company purchased 90% of the outstanding shares of Subsidiary Company by paying P300,000. On this date, Subsidiary had Share Capital and Retained Earnings amounting to P150,000 and P230,000 respectively. Also, on this date, an equipment was undervalued by P20,000 with remaining useful life of 10 years. On the same date, Parent had P1,000,000 of Share Capital and P700,000 of Retained Earnings. The parent opted to measure the NCI using proportionate share. Parent and Subsidiary reported the following for the year ended December 31, 2022 (see image below).On July 31, 2022, Parent sold a machinery with a 5-year remaining useful life costing P1,500,000 with accumulated depreciation of P1,000,000 for P530,000 to Subsidiary. Questions: a. How much is the Net Income Attributable to Parent? b. How much is the Net Income Attributable to NCI? .......
On January 1, 2022, Pet Company purchased 80% of the shares of Sam Company for P1,000,000. The shareholders' equity of Sam Company on that date showed: Ordinary Shares - P570,000 and Retained Earnings - P490,000. Non-controlling interest is initially measured at proportionate share of subsidiary's net assets.On April 30, 2022, Pet acquired used machinery for P84,000 from Sam that was being carried in the latter's books at P105,000. The asset still has a remaining useful life of 5 years. On the other hand, on August 31, 2022, Sam purchased an equipment that was already 20% depreciated from Pet for P345,000. The original cost of this equipment was P375,000 and had a remaining life of 8 years.Net income of Pet Company and Sam Company for 2022 amounted to P360,000 and P155,000. Dividends paid totaled to P115,000 and P52,500 for Pet and Sam, respectively.Required:On the consolidated financial statements in 2022, how much would be the Non-controlling interest in the net income of…
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