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On January 1, 2020, P Corp. purchased 80% of S Co.'s P10 par ordinary shares for 1. P986,000. On this date, the carry ing amount of S's net assets was P1,000,000. The fair values of S Co.'s identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net), which were P120,000 in excess of the carrying amount. The estimated remaining life of the asset is 5 years. For the year ended December 31, 2020, S had net income of P290,000 and paid cash dividends totaling P125,000. Loss on impairment of goodwill in 2020 amounted to P20,000. P Corp. uses the proportionate method in measuring non-controlling interest. Determine the non-controlling interest in net income on December 31, 2020. P53,200 b. P58,000 c. P49,200 d. P24,200 a.

On January 1, 2020, P Corp. purchased 80% of S Co.'s P10 par ordinary shares for 1. P986,000. On this date, the carry ing amount of S's net assets was P1,000,000. The fair values of S Co.'s identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net), which were P120,000 in excess of the carrying amount. The estimated remaining life of the asset is 5 years. For the year ended December 31, 2020, S had net income of P290,000 and paid cash dividends totaling P125,000. Loss on impairment of goodwill in 2020 amounted to P20,000. P Corp. uses the proportionate method in measuring non-controlling interest. Determine the non-controlling interest in net income on December 31, 2020. P53,200 b. P58,000 c. P49,200 d. P24,200 a.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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CHAPTER 3: CONSOLIDATION- SUBSEQUENT TO DATE OF ACQUISITION Page | 122 The total Stockholders Equity in the consolidated balance sheet on January 2,2019 is: a. P32,232,000 b. P32,864,000 c. P32,624,000 d. P32,360,000 3. Using the data above, the NCI on December 31,2019 is: a. P1,449,600 b. P1,465,600 c. P1,542,400 d. P1,414,400
Transcribed Image Text:CHAPTER 3: CONSOLIDATION- SUBSEQUENT TO DATE OF ACQUISITION Page | 122 The total Stockholders Equity in the consolidated balance sheet on January 2,2019 is: a. P32,232,000 b. P32,864,000 c. P32,624,000 d. P32,360,000 3. Using the data above, the NCI on December 31,2019 is: a. P1,449,600 b. P1,465,600 c. P1,542,400 d. P1,414,400
CHAPTER 3: CONSOLIDATION SUBSEQUENT TO DATE OF ACQUISITION Page | 121 MULTIPLE CHOICE (PROBLEM SOLVING) 1. On January 1, 2020, P Corp. purchased 80% of S Co.'s P10 par ordinary shares for P986,000. On this date, the carry ing amount of S's net assets was P1,000,000. The fair values of S Co.'s identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net), which were P120,000 in excess of the carrying amount. The estimated remaining life of the asset is 5 years. For the year ended December 31, 2020, S had net income of P290,000 and paid cash dividends totaling P125,000. Loss on impairment of goodwill in 2020 amounted to P20,000. P Corp. uses the proportionate method in measuring non-controlling interest. Determine the non-controlling interest in net income on December 31, 2020. a. P53,200 b. P58,000 c. P49,200 d. P24,200 2. In January 2, 2019, Palawan Company purchased 80% of the outstanding stock of Samar Company for P 5,600,000. Palawan opted to measure NCI proportionate to their share on the identifiable net assets. At that date, the stockholder's equity of Palawan Company and Samar Company is composed of the following: Palawan Company P 20,000,000 4,800,000 6,000,000 Samar Company P 4,600,000 1,400,000 1,480,000 Ordinary Shares APIC Retained Earnings The carry ing values of the assets and liabilities of Samar Company are equal to their fair values, except for the following: • Equipment with a five years remaining life had a fair value which is lower than the carrying amount by P240,000. The fair value of Samar Company's loan payable is to be adjusted upward by P 80,000. The Net income reported and dividends paid by Palawan and Samar for 2019 follows: Palawan Samar Net Income P 360,000 P 1,480,000 1,000,000 Dividends 320,000
Transcribed Image Text:CHAPTER 3: CONSOLIDATION SUBSEQUENT TO DATE OF ACQUISITION Page | 121 MULTIPLE CHOICE (PROBLEM SOLVING) 1. On January 1, 2020, P Corp. purchased 80% of S Co.'s P10 par ordinary shares for P986,000. On this date, the carry ing amount of S's net assets was P1,000,000. The fair values of S Co.'s identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net), which were P120,000 in excess of the carrying amount. The estimated remaining life of the asset is 5 years. For the year ended December 31, 2020, S had net income of P290,000 and paid cash dividends totaling P125,000. Loss on impairment of goodwill in 2020 amounted to P20,000. P Corp. uses the proportionate method in measuring non-controlling interest. Determine the non-controlling interest in net income on December 31, 2020. a. P53,200 b. P58,000 c. P49,200 d. P24,200 2. In January 2, 2019, Palawan Company purchased 80% of the outstanding stock of Samar Company for P 5,600,000. Palawan opted to measure NCI proportionate to their share on the identifiable net assets. At that date, the stockholder's equity of Palawan Company and Samar Company is composed of the following: Palawan Company P 20,000,000 4,800,000 6,000,000 Samar Company P 4,600,000 1,400,000 1,480,000 Ordinary Shares APIC Retained Earnings The carry ing values of the assets and liabilities of Samar Company are equal to their fair values, except for the following: • Equipment with a five years remaining life had a fair value which is lower than the carrying amount by P240,000. The fair value of Samar Company's loan payable is to be adjusted upward by P 80,000. The Net income reported and dividends paid by Palawan and Samar for 2019 follows: Palawan Samar Net Income P 360,000 P 1,480,000 1,000,000 Dividends 320,000
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