Prepare the working paper eliminating entries for 2016 for the purpose of preparing consolidated financial statement. Prepare a consolidated workpaper on December 31, 2014. Determine the following items for December 31, 2016 Consolidated net income Net income attributable to parent
Peer, Inc. acquires 75 percent of Sea-breeze Corporation for P600,000 cash on January 1, 2016. The remaining percent of the Sea-breeze shares traded near a total value of 200,000 both before and after the acquisition date. NCI is measured on a full basis .On January 1, 2016, Sea-breeze had the following assets and liabilities:
|
|
Book Value |
Fair Value |
|
Current Assets |
P 250,000 |
P 250,000 |
|
Land |
100,000 |
100,000 |
|
Building (net) – 5-year-year life |
400,000 |
350,000 |
|
Equipment (net) – 8-year life |
300,000 |
400,000 |
|
Patent (10-year life) |
-0- |
50,000 |
|
Accounts Payable |
(200,000) |
(200,000) |
|
Bonds Payable – 5-years |
(150,000) |
(175,000) |
|
Net |
P 700,000 |
P 775,000 |
|
Common Stock |
P 650,000 |
|
|
|
P 50,000 |
|
The companies’ financial statements for the year ending December 31, 2016 using cost method are as follows:
|
|
Peer |
Sea-Breeze |
|
Revenue |
P (800,000) |
P (250,000) |
|
Operating expenses |
550,000 |
160,000 |
|
Dividend Income |
( 60,000) |
0 |
|
Net Income |
P (310,000) |
P (90,000) |
|
|
Peer |
Sea-Breeze |
|
Retained earnings, 1/1/16 |
P (700,000) |
P (50,000) |
|
Net Income |
(310,000) |
( 90,000) |
|
Dividends paid |
100,000 |
80,000 |
|
Retained earnings, 12/31/16 |
P (910,000) |
P (60,000) |
|
Current Assets |
P 360,000 |
P 207,500 |
|
Land |
320,000 |
200,000 |
|
Building (net) |
750,000 |
320,000 |
|
Equipment (net) |
370,000 |
262,500 |
|
Investment in Sea-breeze |
600,000 |
|
|
Total Assets |
P 2,400,000 |
P 990,000 |
|
Liabilities |
P (600,000) |
P (130,000) |
|
Bonds Payable |
(290,000) |
(150,000) |
|
Common Stock |
(600,000) |
(650,000) |
|
Retained Earnings, 12/31/16 |
(910,000) |
(60,000) |
|
Total Liabilities & Equities |
P (2,400,000) |
P (990,000) |
Required:
- Prepare the working paper eliminating entries for 2016 for the purpose of preparing consolidated financial statement.
- Prepare a consolidated workpaper on December 31, 2014.
- Determine the following items for December 31, 2016
- Consolidated net income
- Net income attributable to parent
- Non-Controlling interests in the consolidated net income
- Consolidated retained earnings
- Non-controlling interest
- Consolidated total assets
- Consolidated total liabilities
- Consolidated
stockholder’s equity
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