Solution Chapter 17

Chapter 17

Problem I

1. 20x4 Sales 1,080,000

Purchases (Cost of Goods Sold) 1,080,000

12/31 Inventory (Income Statement)

[216,000 (216,000/1.20)] 36,000 12/31 Inventory (Balance Sheet) 36,000

20x5

Sales 1,200,000

Purchases (Cost of Goods Sold) 1,200,000

12/31 Inventory (Income Statement)

[300,000 (300,000/1.20)] 50,000 12/31 Inventory (Balance Sheet) 50,000

Beginning R/E Puma 36,000 1/1 Inventory (Income Statement) 36,000

2. Consolidated Net Income for 20x5

P Companys net income from own/separate operations. P 760,000

Realized profit in beginning inventory of S Company (downstream sales) 36,000

Unrealized profit in ending inventory of S Company (downstream sales) (_50,000)

P Companys realized net income from separate operations*... P 746,000

S Companys net income from own operations. P 460,000

Realized profit in beginning inventory of P Company (upstream sales) 0

Unrealized profit in ending inventory of P Company (upstream sales) ( 0)

S Companys realized net income from separate operations*... P 460,000 460,000

Total P1,206,000

Less: Amortization of allocated excess 0

Consolidated Net Income for 20x5 P1,206,000

Less: Non-controlling Interest in Net Income* * 92,000

Controlling Interest in Consolidated Net Income or Profit attributable to

equity holders of parent 20x5..

P 1,114,000

*that has been realized in transactions with third parties.

Or, alternatively Consolidated Net Income for 20x5








S Companys realized net income from separate operations*... P460,000 460,000

Total P1,206,000

Less: Non-controlling Interest in Net Income* * P 92,000

Amortization of allocated excess 0 92,000


equity holders of parent..

P1,114,000

Add: Non-controlling Interest in Net Income (NCINI) _ 92,000

Consolidated Net Income for 20x5 P 1,206,000


**Non-controlling Interest in Net Income (NCINI) for 20x5

S Companys net income of Subsidiary Company from its own operations (Reported net income of Son Company)

P460,000



S Companys realized net income from separate operations P460,000

Less: Amortization of allocated excess _____0

P460,000

Multiplied by: Non-controlling interest %.......... 20%

Non-controlling Interest in Net Income (NCINI) partial goodwill P 92,000

Problem II

1. Sales 1,020,000

Purchases (Cost of Sales) 1,020,000

To eliminate intercompany sales.

12/31 Inventory (Income Statement) 51,000

Inventory (Balance Sheet) 51,000

To eliminate unrealized intercompany profit in ending inventory.

Beginning Retained Earnings Pinta (.90 P40,000) 36,000

Noncontrolling interest 4,000

1/1 Inventory (Balance Sheet) 40,000

To recognize unrealized profit in beginning inventory realized during the year.

Consolidated Net Income for 20x5

P Companys net income from own/separate operations. P 1,720,000

Realized profit in beginning inventory of S Company (downstream sales) 0

Unrealized profit in ending inventory of S Company (downstream sales) (_ 0)

P Companys realized net income from separate operations*... P 1, 720,000


Realized profit in beginning inventory of P Company (upstream sales) 40,000

Unrealized profit in ending inventory of P Company (upstream sales) ( 51,00 0)

Son Companys realized net income from separate operations*... P 589,000 589,000

Total P2,309,000






P 2,250,100





Unrealized profit in ending inventory of S Company (downstream sales) (________0)

P Companys realized net income from separate operations*... P1,720,,000



Unrealized profit in ending inventory of P Company (upstream sales) ( 51,000)

S Companys realized net income from separate operations*... P589,000 589,000

Total P2,309,000


Amortization of allocated excess 0 __58,900



P2,250,100






P600,000



Son Companys realized net income from separate operations P589,000


P589,000


Non-controlling Interest in Net Income (NCINI) P 58,900

Problem III




Unrealized profit in ending inventory of S Company (downstream sales) (_ 45,00 0)

P Companys realized net income from separate operations*... P 3,609,000

S Companys net income from own operations (P1,500,000 + P2,400,000) P3,900,000

Realized profit in beginning inventory of P Company (upstream sales) Salad 66,000

Realized profit in beginning inventory of P Company (upstream sales)- Tuna 63,000

Unrealized profit in ending inventory of P Company (upstream sales) Salad ( 57,000)

Unrealized profit in ending inventory of P Company (upstream sales) Tuna ( 69,000)

S Companys realized net income from separate operations*... P3,903,000 3,903,000

Total P7,512,000



Less: Non-controlling Interest in Net Income* *- Salad P 301,800

Non-controlling Interest in Net Income* *- Tuna ___239,400 ___541,200



P6,970,800





Unrealized profit in ending inventory of S Company (downstream sales) (___45,000)

P Companys realized net income from separate operations*... P3,609,,000

S Companys net income from own operations (P1,500,000 + P2,400,000) P3,900,000

Realized profit in beginning inventory of P Company (upstream sales) Salad 66,000

Realized profit in beginning inventory of P Company (upstream sales)- Tuna 63,000

Unrealized profit in ending inventory of P Company (upstream sales) Salad ( 57,000)

Unrealized profit in ending inventory of P Company (upstream sales) Tuna ( 69,000)

S Companys realized net income from separate operations*... P3,903,000 3,903,000

Total P7,512,000

Less: Non-controlling Interest in Net Income* * - Salad P 301,800

Non-controlling Interest in Net Income* * - Tuna 239,400

Amortization of allocated excess 0 __541,200



P6,970,800

Add: Non-controlling Interest in Net Income (NCINI) _541,200



**Salad Non-controlling Interest in Net Income (NCINI) for 20x4

S Companys net income of Subsidiary Company from its own operations (Reported net income of S Company)

P1,500,000



Son Companys realized net income from separate operations P1,509,000


P1,509,000

Multiplied by: Non-controlling interest %.......... __ 20%


**Tuna

Non-controlling Interest in Net Income (NCINI) for 20x4


P2,400,000



Son Companys realized net income from separate operations P2,394,000


P2,394,000



Realized Profit in Beginning inventory:

Downstream Sales (Sales from Parent to Subsidiary)

P414,000 x 15/115 P54,000

Upstream Sales (Sales from Subsidiary-Salad to Parent):

Salad: P396,000 x 20/120 66,000

Upstream Sales (Sales from Subsidiary-Tuna to Parent):

Tuna: P315,000 x 25/125 63,000

Unrealized Profit in Ending inventory:

Downstream Sales (Sales from Parent to Subsidiary)

P345,000 x 15/115 P45,000

Upstream Sales (Sales from Subsidiary-Salad to Parent):

Salad: P342,000 x 20/120 57,000

Upstream Sales (Sales from Subsidiary-Tuna to Parent):

Tuna: P345,000 x 25/125 69,000

Problem IV

1.

Sales 4,000,000

Cost of Goods Sold 4,000,000

Cost of Goods Sold 250,000

Ending Inventory (Balance Sheet) 250,000

[P1,250,000 - (P1,250,000/1.25)]

1/1 Retained Earnings P Company (1) 84,000 Noncontrolling interest (2) 21,000

Cost of Goods Sold (Beginning Inventory) 105,000

[P525,000 (P525,000/1.25)] = P105,000

(1) .8(P105,000)

(2) .2(P105,000)

2/3. P3,000,000 .20 = P600,000 non-controlling interest in consolidated income.

4. [(.20 P5,400,000) -.20(P1,250,000 P1,250,000/1.25)] = P1,030,000 non-controlling interest in consolidated net assets on December 31, 20x4.

Problem V P COMPANY AND SUBSIDIARY

Consolidated Income Statement

For the Year Ended December 31, 20x4

Sales (P13,800,000 P1,350,000) P12,450,000 Cost of Goods Sold (a) P7,755,000

Operating Expenses 1,800,000 9,555,000

Consolidated Income 2,895,000

Less Non-controlling Interest in Consolidated Income (b) 197,500

Controlling Interest in Consolidated Net Income P2,697,500

(a) Reported Cost of Goods Sold P9,000,000

Less intercompany sales in 20x4 (1,350,000)

Plus unrealized profit in ending inventory (2/5 x (P1,350,000 - P900,000)) 180,000

Less realized profit in beginning inventory (1/4 x (P1,800,000 - P1,500,000)) (75,000)

Corrected cost of goods sold P7,755,000

(b) Reported net income of subsidiary P1,900,000

Plus unrealized profit on subsidiary sales in 2013 that is considered realized in 20x4

(1/4 x (P1,800,000 - P1,500,000)) 75,000

Less unrealized profit on subsidiary sales in 20x4 (there were no upstream sales in 20x4) 0

Income realized in transactions with third parties 1,975,000

0.10

Non-controlling interest in consolidated income P197,500

Problem VIII

(Determine selected consolidated balances; includes inventory transfers and an outside

ownership.)

Customer list amortization = P65,000/5 years = P13,000 per year

Intercompany Gross profit (P160,000 P120,000) ............................................... P40,000 Inventory Remaining at Year's End ......................................................................... 20%

Unrealized Intercompany Gross profit, 12/31 .............................................................. P8,000

Consolidated Totals:

Inventory = P592,000 (add the two book values and subtract the ending unrealized gross profit of P8,000)

Sales = P1,240,000 (add the two book values and subtract the P160,000 intercompany transfer)

Cost of Goods Sold = P548,000 (add the two book values and subtract the intercompany transfer and add [to defer] ending unrealized gross profit)

P190,000

0.1

Operating Expenses = P443,000 (add the two book values and the amortization expense for the period)

Gross profit: P1,240,000 P548,000 = P692,000 Controlling Interest in CNI:

Gross profit ...................................................................................................... P692,000

Less: Operating expenses ............................................................................ 443,000

Consolidated Net Income ...........................................................................P249,000

Less: NCI-CNI ................................................................................................... 8,700

CI-CNI ...............................................................................................................P240,300

or Consolidated Net Income for 20x5

P Companys net income from own/separate operations (P800-P400-P180) P 220,000




S Companys net income from own operations (P600 P300 P250) P 50,000


Unrealized profit in ending inventory of P Company (upstream sales) ( 8, 000)


Total P 262,000

Less: Amortization of allocated excess 13,000

Consolidated Net Income for 20x5 P 249,000




P 240,300


Or, alternatively










Total P 262,000


Amortization of allocated excess 13,000 21,700



P240,300


Consolidated Net Income for 20x5 P249,000




P 50,000


Unrealized profit in ending inventory of P Company (upstream sales) ( 8,00 0)

S Companys realized net income from separate operations P 42,000


P 29,000



Noncontrolling Interest in Subsidiary's Net Income = P8,700 (30 percent of the reported income after subtracting 13,000 excess fair value amortization and

deferring P8,000 ending unrealized gross profit) Gross profit is included in this

computation because the transfer was upstream from SS to PT.

Problem IX

Requirements 1 to 4:

Schedule of Determination and Allocation of Excess (Partial-goodwill)

Date of Acquisition January 1, 20x4

Fair value of Subsidiary (80%)

Consideration transferred.. P 372,000 Less: Book value of stockholders equity of Son: Common stock (P240,000 x 80%). P 192,000 Retained earnings (P120,000 x 80%)... 96,000 288,000 Allocated excess (excess of cost over book value).. P 84,000 Less: Over/under valuation of assets and liabilities:

Increase in inventory (P6,000 x 80%) P 4,800 Increase in land (P7,200 x 80%). 5,760 Increase in equipment (P96,000 x 80%) 76,800

Decrease in buildings (P24,000 x 80%)..... ( 19,200) Decrease in bonds payable (P4,800 x 80%) 3,840 72,000 Positive excess: Partial-goodwill (excess of cost over

fair value)... P 12,000

The over/under valuation of assets and liabilities are summarized as follows:

S Co.

Book value

S Co.

Fair value

(Over) Under

Valuation

Inventory... P 24,000 P 30,000 P 6,000 Land 48,000 55,200 7,200 Equipment (net)......... 84,000 180,000 96,000

Buildings (net) 168,000 144,000 (24,000)

Bonds payable (120,000) ( 115,200) 4,800 Net.. P 204,000 P 294,000 P 90,000

The buildings and equipment will be further analyzed for consolidation purposes as follows:

S Co.

Book value

S Co.

Fair value

Increase

(Decrease)

Equipment .................. 180,000 180,000 0

Less: Accumulated depreciation.. 96,000 - ( 96,000) Net book value... 84,000 180,000 96,000

S Co.

Book value

S Co.

Fair value

(Decrease)

Buildings................ 360,000 144,000 ( 216,000)

Less: Accumulated depreciation.. 192,000 - ( 192,000) Net book value... 168,000 144,000 ( 24,000)

A summary of depreciation and amortization adjustments is as follows:

Account Adjustments to be amortized

Over/

Under Life

Annual

Amount

Current

Year(20x4) 20x5

Inventory P 6,000 1 P 6,000 P 6,000 P -

Subject to Annual Amortization

Equipment (net)......... 96,000 8 12,000 12,000 12,000

Buildings (net) (24,000) 4 ( 6,000) ( 6,000) (6,000)

Bonds payable 4800 4 1,200 1,200 1,200

P 13,200 P 13,200 P 7,200

The goodwill impairment loss of P3,750 based on 100% fair value would be allocated to the

controlling interest and the NCI based on the percentage of total goodwill each equity interest

received. For purposes of allocating the goodwill impairment loss, the full-goodwill is computed

as follows:

Fair value of Subsidiary (100%)

Consideration transferred: Cash (80%) P 372,000

Fair value of NCI (given) (20%) 93,000

Fair value of Subsidiary (100%) P 465,000

Less: Book value of stockholders equity of Son (P360,000 x 100%) __360,000

Allocated excess (excess of cost over book value).. P 105,000 Add (deduct): (Over) under valuation of assets and liabilities

(P90,000 x 100%) 90,000

Positive excess: Full-goodwill (excess of cost over


In this case, the goodwill was proportional to the controlling interest of 80% and non-controlling

interest of 20% computed as follows:

Value % of Total

Goodwill applicable to parent P12,000 80.00% Goodwill applicable to NCI.. 3,000 20.00% Total (full) goodwill.. P15,000 100.00%

The goodwill impairment loss would be allocated as follows Value % of Total

Goodwill impairment loss attributable to parent or controlling

Interest

P 3,000 80.00%

Goodwill applicable to NCI.. 750 20.00% Goodwill impairment loss based on 100% fair value or full-

Goodwill

P 3,750

100.00%

The unrealized profits on January 1, and on December 31, 20x5, resulting intercompany sales,

are as summarized below:

Downstream Sales:

Year

Sales of Parent to

Subsidiary

Intercompany Merchandise

in 12/31 Inventory

of S Company

Unrealized Intercompany

Profit in Ending Inventory

20x4 P150,000 P150,000 x 60% = P90,000 P90,000 x 20% = P18,000

20x5 120,000 P120,000 x 80% = P96,000 P96,000 x 25% = P24,000

Upstream Sales:

Year

Sales of Subsidiary

to Parent

Intercompany Merchandise

in 12/31 Inventory

of S Company

Unrealized Intercompany

Profit in Ending Inventory

20x4 P 60,000 P60,000 x 50% = P30,000 P30,000 x 40% = P12,000

20x5 75,000 P 75,000 x 40% = P30,000 P30,000 x 20% = P 6,000

20x4: First Year after Acquisition

Parent Company Cost Model Entry

January 1, 20x4:

(1) Investment in S Company 372,000 Cash.. 372,000 Acquisition of S Company.

January 1, 20x4 December 31, 20x4: (2) Cash 28,800 Dividend income (P36,000 x 80%). 28,800 Record dividends from S Company.

No entries are made on the parents books to depreciate, amortize or write-off the portion of the allocated excess that expires during 20x4, and unrealized profits in ending inventory.

Consolidation Workpaper Year of Acquisition (E1) Common stock S Co 240,000

Retained earnings S Co 120.000

Investment in S Co 288,000

Non-controlling interest (P360,000 x 20%).. 72,000 To eliminate intercompany investment and equity accounts

of subsidiary on date of acquisition; and to establish non-controlling

interest (in net assets of subsidiary) on date of acquisition.

(E2) Inventory. 6,000

Accumulated depreciation equipment.. 96,000

Accumulated depreciation buildings.. 192,000

Land. 7,200

Discount on bonds payable. 4,800

Goodwill. 12,000

Buildings.. 216,000

Non-controlling interest (P90,000 x 20%).. 18,000

Investment in Son Co. 84,000 To allocate excess of cost over book value of identifiable assets acquired, with remainder to goodwill; and to establish non-

controlling interest (in net assets of subsidiary) on date of acquisition.

(E3) Cost of Goods Sold. 6,000

Depreciation expense.. 6,000


Interest expense 1,200

Goodwill impairment loss. 3,000

Inventory.. 6,000


Discount on bonds payable 1,200

Goodwill 3,000 To provide for 20x4 impairment loss and depreciation and

amortization on differences between acquisition date fair value and

book value of Ss identifiable assets and liabilities as follows:

Cost of

Goods

Sold

Depreciation/

Amortization

Expense

Amortization

-Interest

Total

Inventory sold P 6,000

Equipment P 12,000

Buildings ( 6,000)

Bonds payable _______ _______ P 1,200

Totals P 6,000 P 2,000 P1,200 13,200

(E4) Dividend income - P. 28,800


Dividends paid S 36,000 To eliminate intercompany dividends and non-controlling interest

share of dividends.

(E5) Sales. 150,000

Cost of Goods Sold (or Purchases) 150,000 To eliminated intercompany downstream sales.

(E6) Sales. 60,000

Cost of Goods Sold (or Purchases) 60,000 To eliminated intercompany upstream sales.

(E7) Cost of Goods Sold (Ending Inventory Income Statement) 18,000

Inventory Balance Sheet 18,000 To defer the downstream sales - unrealized profit in ending inventory

until it is sold to outsiders.


Inventory Balance Sheet 12,000 To defer the upstream sales - unrealized profit in ending inventory


(E9) Non-controlling interest in Net Income of Subsidiary 6,960

Non-controlling interest .. 6,960 To establish non-controlling interest in subsidiarys adjusted net income for 20x4 as follows:

Net income of subsidiary.. P 60,000

Unrealized profit in ending inventory of P

Company (upstream sales)..

( 12,000)

S Companys realized net income from separate operations*...

P 48,000

Less: Amortization of allocated excess [(E3)]. 13,200

P 34,800


Non-controlling Interest in Net Income (NCINI)

partial goodwill

P 6,960

Worksheet for Consolidated Financial Statements, December 31, 20x4.

Cost Model (Partial-goodwill)

80%-Owned Subsidiary

December 31, 20x4 (First Year after Acquisition)

Income Statement P Co S Co. Dr. Cr. Consolidated

Sales

P480,000

P240,000

(5) 150,000

(6) 60,000

P 510,000

Dividend income 28,800 - (4) 36,000 _________

Total Revenue P508,800 P240,000 P 510,000

Cost of goods sold

P204,000

P138,000

(3) 6,000

(7) 18,000

(8) 12,000

(5) 150,000

(6) 60,000

P 168,000

Depreciation expense 60,000 24,000 (3) 6,000 90,000

Interest expense - - (3) 1,200 1,200

Other expenses 48,000 18,000 66,000

Goodwill impairment loss - - (3) 3,000 3,000

Total Cost and Expenses P312,000 P180,000 P328,200

Net Income P196,800 P 60,000 P181,800

NCI in Net Income - Subsidiary - - (9) 6,960 ( 6,960)

Net Income to Retained Earnings P196,800 P 60,000 P174,840

Statement of Retained Earnings

Retained earnings, 1/1

P Company P432,000 P 360,000

S Company P144,000 (1) 120,000

Net income, from above 236,160 72,000 174,840

Total P668,160 P216,000 P538,840

Dividends paid

Perfect Company 86,400 72,000

Son Company - 43,200 (4) 36,000 _ ________

Retained earnings, 12/31 to Balance

Sheet P581,760 P172,800 P 466,840

Balance Sheet

Cash. P 232,800 P 90,000 P 355,200

Accounts receivable.. 90,000 60,000 150,000

Inventory.

120,000

90,000

(2) 6,000

(3) 6,000

(7) 18,000

(8) 12,000 180,000

Land. 1210,000 48,000 (2) 7,200 265,200

Equipment 240,000 180,000 420,000

Buildings 720,000 540,000 (2) 216,000 1,044,000

Discount on bonds payable (2) 4,800 (3) 12000 3,600

Goodwill (2) 12,000 (3) 3,000 9,000


(1) 288,000

(2) 84,000 -

Total P1,984,800 P1,008,000 P2,394,600

Accumulated depreciation

- equipment P 135,000 P 96,000 (2) 96,000 (3) 12,000 P147,000


- buildings

405,000

288,000

(2) 192,000

(3) 6,000 495,000

Accounts payable 120,000 120,000 240,000

Bonds payable 240,000 120,000 360,000

Common stock, P10 par 600,000 600,000

Common stock, P10 par 240,000 (1) 240,000

Retained earnings, from above 581,760 144,000 462,840

Non-controlling interest

_________

_________

(4) 7,200

__________

(1 ) 72,000

(2) 18,000

(9) 6,960 ____89,760

Total P1,984,800 P1,008,000 P 983,160 P 983,160 P2,394,600


P Companys net income from own/separate operations. P168,000

Unrealized profit in ending inventory of S Company (downstream sales) ( 18,000)

P Companys realized net income from separate operations*... P150,000


Unrealized profit in ending inventory of S Company (upstream sales) ( 12,000)


Total P198,000


Amortization of allocated excess (refer to amortization above) 13,200

Goodwill impairment (impairment under partial-goodwill approach) 3,000 23,160



P174,840


Consolidated Net Income for 20x4 P181.800




P 60,000




P 34,800




Since NCI share of goodwill is not recognized, no adjustment is required for the impairment loss

on goodwill and impairment losses are not shared with NCI.

20x5: Second Year after Acquisition P Co. S Co.

Sales P 540,000 P 360,000

Less: Cost of goods sold 216,000 192,000

Gross profit P 324,000 P 168,000

Less: Depreciation expense 60,000 24,000

Other expense 72,000 54,000

Net income from its own separate operations P 192,000 P 90,000

Add: Dividend income 38,400 -

Net income P 230,400 P 90,000

Dividends paid P 72,000 P 48,000

No goodwill impairment loss for 20x5.

20x5: Parent Company Cost Model Entry

Only a single entry is recorded by the parent in 20x5 in relation to its subsidiary investment:

January 1, 20x5 December 31, 20x5:

Cash 38,400

Dividend income (P48,000 x 80%). 38,400

Record dividends from S Company.

On the books of S Company, the P48,000 dividend paid was recorded as follows:

Dividends paid 48,000

Cash 48,000

Dividends paid by S Co..

Consolidation Workpaper Second Year after Acquisition (E1) Investment in S Company 19,200

Retained earnings P Company 19,200 To provide entry to convert from the cost method to the equity

method or the entry to establish reciprocity at the beginning of the

year, 1/1/20x5, computed as follows:

Retained earnings S Company, 1/1/20x5 P144,000

Retained earnings S Company, 1/1/20x4 120,000

Increase in retained earnings.. P 24,000

Multiplied by: Controlling interest % 80%

Retroactive adjustment P 19,200

(E2) Common stock S Co 240,000

Retained earnings S Co., 1/1/20x5 144.000

Investment in S Co (P384,000 x 80%) 307,200


of subsidiary and to establish non-controlling interest (in net assets of

subsidiary) on January 1, 20x5.


Accumulated depreciation equipment.. .... 96,000

Accumulated depreciation buildings.. ... 192,000

Land. 7,200


Goodwill. 12,000

Buildings........................... 216,000

Non-controlling interest (P90,000 x 20%)............................ 18,000

Investment in S Co. 84,000 To allocate excess of cost over book value of identifiable assets acquired, with remainder to goodwill; and to establish non-

controlling interest (in net assets of subsidiary) on January 1, 20x5.

(E4) Retained earnings P Company, 1/1/20x5 [(P13,200 x 80%) + P3,000, impairment loss on

partial-goodwill]

13,560

Non-controlling interests (P13,200 x 20%). 2,640




Inventory.. 6,000



Goodwill 3,000 To provide for years 20x4 and 20x5 depreciation and amortization on

differences between acquisition date fair value and book value of

Ss identifiable assets and liabilities as follows: Year 20x4 amounts are debited to Ps retained earnings & NCI;

Year 20x5 amounts are debited to respective nominal accounts.

(20x4)

Retained

earnings,

Depreciation/

Amortization

expense

Amortization

-Interest


Equipment 12,000 P 12,000

Buildings (6,000) ( 6,000)

Bonds payable 1,200 ________ P 1,200

Sub-total P13,200 P 6,000 P 1,200

Multiplied by: 80%

To Retained earnings P 10,560

Impairment loss 3,000

Total P 13,560




share of dividends.

(E6) Sales. 120,000


(E7) Sales. 75,000


(E8) Beginning Retained Earnings P Company 18,000

Cost of Goods Sold (Ending Inventory Income Statement) 18,000 To realized profit in downstream beginning inventory deferred in the

prior period.

(E9) Beginning Retained Earnings P Company (P12,000 x 80%) 9,600

Noncontrolling interest (P12,000 x 20%) 2,400

Cost of Goods Sold (Ending Inventory Income Statement) 12,000 To realized profit in beginning inventory deferred in the prior period.









Realized profit in beginning inventory of P

Company - 20x5 (upstream sales)

12,000



( 6,000)

S Companys Realized net income* P 96,000


P 88,800


Non-controlling Interest in Net Income (NCINI )

partial goodwill

P 17,760

*from separate transactions that has been realized in transactions

with third persons.


Cost Model (Partial-goodwill)


December 31, 20x5 (Second Year after Acquisition)

Income Statement P Co S Co. Dr. Cr. Consolidated

Sales

P540,000

P360,000

(6) 120,000

(7) 75,000

P 705,000

Dividend income 38,400 - (5) 38,400 ___________


Cost of goods sold

P216,000

P192,000

(10) 24,000

(11) 6,000

(6) 120,000

(7) 75,000

(8) 18,000

(9) 12,000

213,000



Other expenses 72,000 54,000 126,000

Goodwill impairment loss - - -

Total Cost and Expenses P348,000 P270,000 P 430,200

Net Income P230,400 P 90,000 P 274,800


Net Income to Retained Earnings P230,400 P 90,000 P 257,040



P Company

P484,800

(2) 13,560

(8) 18,000

(9) 9,600 (1) 19,200 P 462,840

S Company P 144,000 (2) 144,000


Total P715,200 P234,000 P 719,880

Dividends paid

P Company 72,000 72,000

S Company - 48,000 (5) 48,000 _ ________


Sheet P643,200 P186,000 P 647,880

Balance Sheet

Cash. P 265,200 P 102,000 P 367,200


Inventory.

216,000

108,000

(3) 7,200

(4) 7,200

(10) 24,000

(11) 6,000 294,000

Land. 210,000 48,000 (3) 7,200 265,200

Equipment 240,000 180,000 420,000

Buildings 720,000 540,000 (3) 216,000 1,044,000

Discount on bonds payable (3) 4,800 (4) 2,400 2,400

Goodwill (3) 12,000 (4) 3,000 9,000

Investment in S Co 372,000 (1) 19,200

(2) 307,200

(3) 84,000 -

Total P2,203,200 P1,074,000 P2,677,800


- equipment P 150,000 P 102,000 (3) 96,000 (4) 24,000 P180,000


- buildings

450,000

306,000

(3) 192,000

(4) 12,000 552,000


Bonds payable 240,000 120,000 360,000




Non-controlling interest ___ _____ (4) 2,640 (2 ) 76,800 ____97,920

_________ (5) 9,600

(9) 2,400

__________

(3) 18,000

(12) 17,760

Total 2,203,200 P1,074,000 P1,077,360 P1,077,360 P2,677,800

5. 1/1/20x4

a. On date of acquisition the retained earnings of parent should always be considered as

the consolidated retained earnings, thus:

Consolidated Retained Earnings, January 1, 20x4

Retained earnings P Company, January 1, 20x4 (date of acquisition) P360,000

b. Non-controlling interest (partial-goodwill), January 1, 20x4

Common stock Subsidiary Company P 240,000

Retained earnings Subsidiary Company. 120,000

Stockholders equity Subsidiary Company... P 360,000

Adjustments to reflect fair value - (over) undervaluation of assets and liabilities 90,000

Fair value of stockholders equity of subsidiary, January 1, 20x4 P 450,000

Multiplied by: Non-controlling Interest percentage... 20

Non-controlling interest (partial) P 90,000

c. Consolidated SHE:

Stockholders Equity

Common stock, P10 par P 600,000

Retained earnings 360,000

Parents Stockholders Equity / CI - SHE P 960,000

NCI, 1/1/20x4 ___90,000

Consolidated SHE, 1/1/20x4 P1,050,000

6.

Note: The goodwill recognized on consolidation purely relates to the parents share. NCI is measured as a proportion of identifiable assets and goodwill attributable to NCI share is not

recognized.

12/31/20x4:

a. CI-CNI P174,840 Consolidated Net Income for 20x4







Total P198,000



Goodwill impairment (impairment under partial-goodwill approach) 3,000 23,160



P174,840




b. NCI-CNI P6,960 **Non-controlling Interest in Net Income (NCINI) for 20x4


P 60,000




P 34,800




c. CNI, P181,800 refer to (a)

d. On subsequent to date of acquisition, consolidated retained earnings would be computed

as follows:

Consolidated Retained Earnings, December 31, 20x4

Retained earnings - P Company, January 1, 20x4 (date of acquisition) P360,000

Add: Controlling Interest in Consolidated Net Income or Profit attributable to

equity holders of parent for 20x4

174,840

Total P534,840

Less: Dividends paid P Company for 20x4 72,000

Consolidated Retained Earnings, December 31, 20x4 P462,840

e. The goodwill recognized on consolidation purely relates to the parents share. NCI is measured as a proportion of identifiable assets and goodwill attributable to NCI share is

not recognized. The NCI on December 31, 20x4 are computed as follows: Non-controlling interest (partial-goodwill), December 31, 20x4

Common stock Subsidiary Company, December 31, 20x4 P 240,000

Retained earnings Subsidiary Company, December 31, 20x4

Retained earnings Subsidiary Company, January 1, 20x4 P120,000

Add: Net income of subsidiary for 20x4 6,000

Total P180,000

Less: Dividends paid 20x4 36,000 144,000

Stockholders equity Subsidiary Company, December 31, 20x4 P 384,000

Adjustments to reflect fair value - (over) undervaluation of assets and

liabilities, date of acquisition (January 1, 20x4)

90,000

Amortization of allocated excess (refer to amortization above) 20x4 ( 13,200)

Fair value of stockholders equity of subsidiary, December 31, 20x4 P460,000

Less: Unrealized profit in ending inventory of P Company (upstream sales) 12,000

Realized stockholders equity of subsidiary, December 31, 20x4 P448,800


Non-controlling interest (partial-goodwill).. P 89,760

f. Consolidated SHE:

Stockholders Equity



Parents Stockholders Equity / CI SHE, 12/31/20x4 P1,062,840

NCI, 12/31/20x4 ___89,760


12/31/20x5:

a. CI-CNI Consolidated Net Income for 20x5









Total P282,000






P257,040











Total P282,000


Amortization of allocated excess 7,200 24,960

Controlling Interest in Consolidated Net Income or Profit attributable to equity

holders of parent..

P257,040




b. NCI-CNI **Non-controlling Interest in Net Income (NCINI) for 20x5


P 90,000





P 88,800



c. CNI, P274,800 refer to (a) d. On subsequent to date of acquisition, consolidated retained earnings would be

computed as follows: Consolidated Retained Earnings, December 31, 20x5

Retained earnings - Parent Company, January 1, 20x5 (cost model P484,800

Less: Unrealized profit in ending inventory of S Company (downstream sales)

20x4 (UPEI of S 20x4) or Realized profit in beginning inventory of S Company (downstream sales) 20x4 (RPBI of S - 20x5).

18,000

Adjusted Retained Earnings Parent 1/1/20x5 (cost model (S Companys Retained earnings that have been realized in transactions with third

parties..

P466,800

Adjustment to convert from cost model to equity method for purposes of

consolidation or to establish reciprocity:/Parents share in adjusted net increased in subsidiarys retained earnings:

Retained earnings Subsidiary, January 1, 20x5 P 144,000

Less: Retained earnings Subsidiary, January 1, 20x4 120,000

Increase in retained earnings since date of acquisition P 24,000

Less: Amortization of allocated excess 20x4 13,200

Unrealized profit in ending inventory of P Company (upstream

sales) 20x4 (UPEI of P 20x4) or Realized profit in beginning inventory of P Company (upstream sales) 20x5 (RPBI of P - 20x5)

12,000

(P 1,200)

Multiplied by: Controlling interests %................... 80%

(P 960)

Less: Goodwill impairment loss, partial goodwill 3,000 ( 3,960)

Consolidated Retained earnings, January 1, 20x5 P462,840



257,040

Total P748,680

Less: Dividends paid Parent Company for 20x5 72,000


*this procedure would be more appropriate, instead of multiplying the full-goodwill impairment loss of P3,125 by

80%. There might be situations where the controlling interests on goodwill impairment loss would not be

proportionate to NCI acquired (refer to Illustration 15-6).

Or, alternatively: Consolidated Retained Earnings, December 31, 20x5

Retained earnings - Parent Company, December 31, 20x5 (cost model P643,200

Less: Unrealized profit in ending inventory of S Company (downstream sales)

20x5 (UPEI of S 20x5) or Realized profit in beginning inventory of S Company (downstream sales) 20x6 (RPBI of S - 20x6).

24,000

Adjusted Retained Earnings Parent 12/31/20x5 (cost model ( S Companys Retained earnings that have been realized in transactions with third parties..

P619,200

Adjustment to convert from cost model to equity method for purposes of

consolidation or to establish reciprocity:/Parents share in adjusted net increased in subsidiarys retained earnings:

Retained earnings Subsidiary, December 31, 20x5 P 186,000

Less: Retained earnings Subsidiary, January 1, 20x4 120,000

Increase in retained earnings since date of acquisition P 66,000

Less: Accumulated amortization of allocated excess 20x4 and 20x5 (P11,000 + P6,000)

20,400

Unrealized profit in ending inventory of P Company (upstream

sales) 20x5 (UPEI of P 20x5) or Realized profit in beginning inventory of P Company (upstream sales) 20x6 (RPBI of P - 20x6)

6,000

P 39,600

Multiplied by: Controlling interests %................... 80%

P 31,680

Less: Goodwill impairment loss, partial goodwill 3,000 28,680

Consolidated Retained earnings, December 31, 20x5 P647,880

e. Non-controlling interest (partial-goodwill), December 31, 20x5



Retained earnings Subsidiary Company, January 1, 20x5* P144,000


Total P234,000





90,000

Amortization of allocated excess (refer to amortization above) :

20x4 P 13,200

20x5 7,200 ( 20,400)

Fair value of stockholders equity of subsidiary, December 31, 20x5 P 495,600

Less: Unrealized profit in ending inventory of P Company (upstream

sales) 20x5 (UPEI of P 20x5) or Realized profit in beginning inventory of P Company (upstream sales) 20x6 (RPBI of P - 20x6

6,000

Realized stockholders equity of subsidiary, December 31, 20x5. P489,600


Non-controlling interest (partial goodwill).. P 97,920

* the realized profit in beginning inventory of P Company (upstream sales) 20x5 (RPBI of P - 20x5 amounting to P10,000 is already included in the beginning retained earnings of S Company.


Stockholders Equity



Parents Stockholders Equity / CI SHE, 12/31/20x4 P1,247,880

NCI, 12/31/20x4 ___97,920


Problem X

Requirements 1 to 4:

Schedule of Determination and Allocation of Excess

Date of Acquisition January 1, 20x4 Fair value of Subsidiary (80%)

Consideration transferred (80%).. P 372,000

Fair value of NCI (given) (20%).. 93,000

Fair value of Subsidiary (100%). P 465,000

Less: Book value of stockholders equity of Son:

Common stock (P240,000 x 100%). P 240,000

Retained earnings (P120,000 x 100%)... 120,000 360,000

Allocated excess (excess of cost over book value).. P 105,000

Less: Over/under valuation of assets and liabilities:

Increase in inventory (P6,000 x 100%) P 6,000

Increase in land (P7,200 x 100%). 7,200

Increase in equipment (P96,000 x 100%) 96,000

Decrease in buildings (P24,000 x 100%)..... ( 24,000)

Decrease in bonds payable (P4,800 x 100%) 4,800 90,000

Positive excess: Full-goodwill (excess of cost over


A summary or depreciation and amortization adjustments is as follows:

Account Adjustments to be amortized

Over/

under Life

Annual

Amount

Current

Year(20x4) 20x5

Inventory P 6,000 1 P 6,000 P 6,000 P -

Subject to Annual Amortization

Equipment (net)......... 96,000 8 12,000 12,000 12,000

Buildings (net) (24,000) 4 ( 6,000) ( 6,000) (6,000)

Bonds payable 4,800 4 1,200 1,200 1,200

P 13,200 P 13,200 P 7,200

20x4: First Year after Acquisition

Parent Company Cost Model Entry January 1, 20x4:

(1) Investment in S Company 372,000 Cash.. 372,000

Acquisition of S Company.

January 1, 20x4 December 31, 20x4: (2) Cash 28,800 Dividend income (P36,000 x 80%). 28,800 Record dividends from Son Company.

On the books of Son Company, the P36,000 dividend paid was recorded as follows:

Dividends paid 36,000 Cash. 36,000 Dividends paid by S Co..

No entries are made on the parents books to depreciate, amortize or write-off the portion of the allocated excess that expires during 20x4.

Consolidation Workpaper First Year after Acquisition (E1) Common stock S Co 240,000

Retained earnings S Co 120.000



of subsidiary on date of acquisition; and to establish non-controlling

interest (in net assets of subsidiary) on date of acquisition.




Land. 7,200


Goodwill. 15,000

Buildings.. 216,000

Non-controlling interest (P90,000 x 20%) + [(P15,000, full P12,000, partial goodwill)]

21,000

Investment in Son Co. 84,000 To allocate excess of cost over book value of identifiable assets acquired, with remainder to goodwill; and to establish non-

controlling interest (in net assets of subsidiary) on date of acquisition.

(E3) Cost of Goods Sold. 6,000




Goodwill impairment loss. 3,750

Inventory.. 6,000



Goodwill 3,750 To provide for 20x4 impairment loss and depreciation and

amortization on differences between acquisition date fair value and

book value of Ss identifiable assets and liabilities as follows:

Cost of

Goods

Sold

Depreciation/

Amortization

Expense

Amortization

-Interest


Equipment P12,000

Buildings ( 6,000)

Bonds payable _______ _______ P 1,200

Totals P 6,000 P 6,000 P1,200




share of dividends.

(E5) Sales. 150,000


(E6) Sales. 60,000












Company (upstream sales)..

( 12,000)

S Companys realized net income from separate operations*...

P 48,000

Less: Amortization of allocated excess [(E3)]. 13,200

P 34,800



partial goodwill P 6,960

Less: Non-controlling interest on impairment

loss on full-goodwill (P3,750 x 20%) or

(P3,750 impairment on full-goodwill less

P3,000, impairment on partial-goodwill)

750


full goodwill

P 6,210


Cost Model (Full-goodwill)


December 31, 20x4 (First Year after Acquisition) Income Statement P Co S Co. Dr. Cr. Consolidated

Sales

P480,000

P240,000

(5) 150,000

(6) 60,000

P 510,000

Dividend income 28,800 - (4) 28,800 _________


Cost of goods sold

P204,000

P138,000

(3) 6,000

(7) 18,000

(8) 12,000

(5) 150,000

(6) 60,000

P 168,000



Other expenses 48,000 18,000 66,000

Goodwill impairment loss - - (3) 3,750 3,750

Total Cost and Expenses P312,000 P180,000 P328,950

Net Income P196,800 P 60,000 P181,050


Net Income to Retained Earnings P196,800 P 60,000 P174,840



P Company P360,000 P 360,000

S Company P120,000 (1) 120,000


Total P556,800 P180,000 P534,840

Dividends paid

P Company 72,000 72,000

S Company - 36,000 (4) 36,000 _ ________


Sheet P484,800 P144,000 P 462,840

Balance Sheet

Cash. P 232,800 P 90,000 P 322,800


Inventory.

120,000

90,000

(2) 6,000

(3) 6,000

(7) 18,000 180,000

(8) 12,000

Land. 210,000 48,000 (2) 7,200 265,200

Equipment 240,000 180,000 420,000

Buildings 720,000 540,000 (2) 216,000 1,044,000


Goodwill (2) 15,000 (3) 3,750 11,250


(3) 288,000

(4) 84,000 -

Total P1,984,800 P1,008,000 P2,396,850


- equipment P 135,000 P 96,000 (2) 96,000 (3) 12,000 P147,000


- buildings

405,000

288,000

(6) 192,000

(7) 6,000 495,000


Bonds payable 240,000 120,000 360,000





_________

_________

(4) 7,200

(1 ) 72,000

(2) 21,000

(9) 6,210 ____92,010

Total P1,984,800 P1,008,000 P 986,160 P 986,160 P2,396,850

20x5: Second Year after Acquisition Perfect Co. Son Co.

Sales P 540,000 P 360,000

Less: Cost of goods sold 216,000 192,000

Gross profit P 324,000 P 168,000

Less: Depreciation expense 60,000 24,000

Other expense 72,000 54,000

Net income from its own separate operations P 192,000 P 90,000

Add: Dividend income 38,400 -

Net income P 230,400 P 90,000

Dividends paid P 72,000 P 48,000

No goodwill impairment loss for 20x5.

20x5: Parent Company Cost Model Entry

Only a single entry is recorded by the parent in 20x5 in relation to its subsidiary investment:

January 1, 20x5 December 31, 20x5:

Cash 38,400

Dividend income (P48,000 x 80%). 38,400

Record dividends from S Company.

On the books of S Company, the P48,000 dividend paid was recorded as follows:

Dividends paid 48,000

Cash 48,000

Dividends paid by S Co..

Consolidation Workpaper Second Year after Acquisition

(E1) Investment in S Company 19,200

Retained earnings P Company 19,200 To provide entry to convert from the cost method to the equity

method or the entry to establish reciprocity at the beginning of the

year, 1/1/20x5.

Retained earnings S Company, 1/1/20x5 P144,000

Retained earnings S Company, 1/1/20x4 120,000

Increase in retained earnings.. P 24,000

Multiplied by: Controlling interest % 80%

Retroactive adjustment P 19,200

(E2) Common stock S Co 240,000

Retained earnings S Co., 1/1/20x5 144.000

Investment in S Co (P384,000 x 80%) 307,200


of subsidiary and to establish non-controlling interest (in net assets of

subsidiary) on January 1, 20x5.

(E3) Inventory. 6000



Land. 7,200


Goodwill. 15,000

Buildings.. 216,000

Non-controlling interest (P90,000 x 20%) + [(P15,000, full P12,000, partial goodwill)]

21,000

Investment in S Co. 84,000 To allocate excess of cost over book value of identifiable assets acquired, with remainder to goodwill; and to establish non-

controlling interest (in net assets of subsidiary) on January 1, 20x5.

(E4) Retained earnings P Company, 1/1/20x5 (P16,950 x 80%)

13,560

Non-controlling interests (P16,950 x 20%). 3,390




Inventory.. 6,000



Goodwill 3,750 To provide for years 20x4 and 20x5 depreciation and amortization on

differences between acquisition date fair value and book value of

Sons identifiable assets and liabilities as follows: Year 20x4 amounts are debited to Perfects retained earnings and NCI.

Year 20x5 amounts are debited to respective nominal accounts..

(20x4)

Retained

earnings,

Depreciation/

Amortization

expense

Amortization

-Interest


Equipment 12,000 P 12,000

Buildings (6,000) ( 6,000)

Bonds payable 1,200 P 1,200

Impairment loss 3,750

Totals P 16,950 P 6,000 P1,200

Multiplied by: CI%.... 80%

To Retained earnings P13,560




share of dividends.

(E6) Sales. 120,000


(E7) Sales. 75,000


(E8) Beginning Retained Earnings P Company 18,000

Cost of Goods Sold (Ending Inventory Income Statement) 18,000 To realized profit in downstream beginning inventory deferred in the

prior period.

(E9) Beginning Retained Earnings P Company (P12,000 x 80%) 9,600

Noncontrolling interest (P12,000 x 20%) 2,400

Cost of Goods Sold (Ending Inventory Income Statement) 12,000 To realized profit in upstream beginning inventory deferred in the

prior period.










Realized profit in beginning inventory of P


12,000



( 6,000)

Son Companys Realized net income* P 96,000


P 88,800



- partial goodwill

P 17,760

Less: NCI on goodwill impairment loss on full-

Goodwill

0


full goodwill

P 17,760

*from separate transactions that has been realized in transactions

with third persons.


Cost Model (Full-goodwill)


December 31, 20x5 (Second Year after Acquisition) Income Statement P Co S Co. Dr. Cr. Consolidated

Sales

P540,000

P360,000

(6) 120,000

(7) 75,000

P 705,000

Dividend income 38,400 - (5) 38,400 ___________


Cost of goods sold

P216,000

P192,000

(10) 24,000

(11) 6,000

(6) 120,000

(7) 90,000

(8) 21,600

(9) 14,400

P 213,000



Other expenses 72,000 54,000 126,000

Goodwill impairment loss - - -

Total Cost and Expenses P348,000 P270,000 P 430,200

Net Income P230,400 P 90,000 P 274,800


Net Income to Retained Earnings P230,400 P 90,000 P 257,040



P Company

P484,800

(3) 13,560

(8) 18,000

(9) 96000 (4) 19,200 P 462,840

S Company P 144,000 (5) 144,000


Total P715,200 P234,000 P 719,880

Dividends paid

P Company 72,000 72,000

S Company - 48,000 (5) 48,000 _ ________


Sheet P643,200 P186,000 P 647,880

Balance Sheet

Cash. P 265,200 P 102,000 P 367,200


Inventory.

216,000

108,000

(6) 6,000

(4) 6,000

(10) 24,000

(11) 6,000 294,000

Land. 210,000 48,000 (3) 7,200 265,200

Equipment 240,000 180,000 420,000

Buildings 720,000 540,000 (3) 216,000 1,044,000


Goodwill (3) 15,000 (4) 3,750 11,250

Investment in S Co 372,000 (1) 19,200

(2) 307,200

(3) 84,000 -

Total P2,203,200 P1,074,000 P2,680,050


- equipment P 150,000 P 102,000 (3) 96,000 (4) 24,000 P180,000


- buildings

450,000

306,000

(3) 192,000

(4) 12,000 552,000


Bonds payable 240,000 120,000 360,000





___ _____

_________

(4) 3,390

(8) 9,600

(9) 2,400

__________

(2 ) 76,800

(3) 21,000

(12) 17,760 ____100,170

Total P2,203,200 P1,074,000 P1,081,110 P1,081,110 P2,680,050

5. 1/1/20x4

a. On date of acquisition the retained earnings of parent should always be considered as

the consolidated retained earnings, thus: Consolidated Retained Earnings, January 1, 20x4

Retained earnings - Parent Company, January 1, 20x4 (date of acquisition) P360,000

b. Non-controlling interest (partial-goodwill), January 1, 20x4

Common stock Subsidiary Company P 240,000

Retained earnings Subsidiary Company. 120,000

Stockholders equity Subsidiary Company... P 360,000

Adjustments to reflect fair value - (over) undervaluation of assets and liabilities 90,000

Fair value of stockholders equity of subsidiary, January 1, 20x4 P 450,000


Non-controlling interest (partial).. P 90,000

Add: Non-controlling interests on full goodwill, 1/1/20x4 (P12,500, full-goodwill P10,000, partial goodwill)

3,000

Non-controlling interest (full-goodwill) P 93,000

c. Consolidated SHE:

Stockholders Equity



Parents Stockholders Equity / CI - SHE P 960,000

NCI, 1/1/20x4 ___93,000


6.

Note: The goodwill recognized on consolidation purely relates to the parents share. NCI is measured as a proportion of identifiable assets and goodwill attributable to NCI share is not

recognized.

12/31/20x4:




Perfect Companys realized net income from separate operations*... P150,000




Total P198,000

Less: Non-controlling Interest in Net Income P 6,1210


Goodwill impairment (impairment under full-goodwill approach) 3,750 23,160



P174,840




b. NCI-CNI P6,210



P 60,000




P 34,800


Non-controlling Interest in Net Income (NCINI) partial P 6,960

Less: Non-controlling interest on impairment loss on full-goodwill (P3,750 x

20%) or (P3,750 impairment on full-goodwill less P3,000, impairment on

partial- goodwill)

750



c. CNI P181,050 refer to (a) d. On subsequent to date of acquisition, consolidated retained earnings would be

computed as follows: Consolidated Retained Earnings, December 31, 20x4

Retained earnings - Parent Company, January 1, 20x4 (date of acquisition) P360,000



174,840

Total P534,840

Less: Dividends paid Parent Company for 20x4 72,000


e. Non-controlling interest ), December 31, 20x4



Retained earnings Subsidiary Company, January 1, 20x4 P120,000


Total P180,000





90,000

Amortization of allocated excess (refer to amortization above) 20x4 ( 13,200)

Fair value of stockholders equity of subsidiary, December 31, 20x4 P460,800

Less: Unrealized profit in ending inventory of P Company (upstream sales) 12,000

Realized stockholders equity of subsidiary, December 31, 20x4 P448,800


Non-controlling interest (partial-goodwill).. P 89,760

Add: Non-controlling interest on full goodwill , net of impairment loss, 12/31/x4:

[(P15,000 full P12,000, partial = P3,000) P750 impairment loss

2,250

Non-controlling interest (full-goodwill).. P 92,010


Stockholders Equity



Parents Stockholders Equity / CI - SHE P1,062,840

NCI, 1/1/20x4 ___92,010


12/31/20x5:










Total P282,000






P257,040


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