On January 02, 2021, Parent Corporation purchased 80% of SUBSIDIARY Company’s ordinary shares for P648,000. P30,000 of the excess (aggregate of consideration and NCI over the book value of net assets) is attributable to goodwill and the balance to an equipment with an economic life of ten years. Non-controlling interest is measured at its fair value on date of acquisition. On the date of acquisition, stockholders’ equity of the two companies were as follows: PARENT CorporationSUBSIDIARY CompanyOrdinary sharesP1,050,000P240,000Retained earnings1,560,000P420,000 On December 31, 2021, SUBSIDIARY Company reported net income of P105,000 and paid dividends of P36,000 to Parent. Parent reported earnings from its own operations of P285,000 and paid dividends of P183,000. Goodwill had been impaired and should be reported at P20,000 on December 31, 2021.What is the non-controlling interest in profit of SUBSIDIARY Company on December 31, 2021? What is the consolidated profit attributable to parent’s shareholders on December 31, 2021? What amount of non-controlling interest is presented in the consolidated statement of financial position on December 31, 2021?

Acquisition accounting can be defined as a set of accounting principles that describes how assets,…

Answered: On January 02, 2021, Parent Corporation…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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On January 02, 2021, Parent Corporation purchased 80% of SUBSIDIARY Company’s ordinary shares for P648,000. P30,000 of the excess (aggregate of consideration and NCI over the book value of net assets) is attributable to goodwill and the balance to an equipment with an economic life of ten years. Non-controlling interest is measured at its fair value on date of acquisition. On the date of acquisition, stockholders’ equity of the two companies were as follows:

	PARENT Corporation	SUBSIDIARY Company
Ordinary shares	P1,050,000	P240,000
Retained earnings	1,560,000	P420,000

On December 31, 2021, SUBSIDIARY Company reported net income of P105,000 and paid dividends of P36,000 to Parent. Parent reported earnings from its own operations of P285,000 and paid dividends of P183,000. Goodwill had been impaired and should be reported at P20,000 on December 31, 2021.

What is the non-controlling interest in profit of SUBSIDIARY Company on December 31, 2021?
What is the consolidated profit attributable to parent’s shareholders on December 31, 2021?
What amount of non-controlling interest is presented in the consolidated statement of financial position on December 31, 2021?

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