Exercise Answers - Consolidated FS - Statement of Financial Position
Exercise Answers - Consolidated FS - Statement of Financial Position
The
consideration given exceeded the fair value of identifiable net assets. The acquired company
owned equipment with a market value in excess of the carrying amount as of the date of
combination. A consolidated balance sheet prepared on December 31, 2017, would
Report the unamortized portion of the excess of the market value over the carrying amount of
the equipment as part of plant and equipment.
On January 1, Year 2, Carlito Company acquired 80% interests in Harries Company for
P2,000,000 cash. The stockholder’s equity of Harries at the time of acquisition is
P1,875,000. On January 1, Year 2, NCI is measured at its implied fair value. The
excess of cost over books value of interest acquired is allocated to the following assets:
Inventorie
P100, 000 (sold in Year 2)
s
Building P200, 000 (5- year remaining
life)
During Year 2, Harries Company reported total comprehensive income of P500,000 and
paid dividend for P100,000
How much goodwill (gain on acquisition) is reported in the consolidated statement of
financial position on 1/1/Year 2?
P325,000
Andrew owns 100% of the share capital of the following companies. The directors
are unsure of whether the investments should be consolidated.
In which of the following circumstances would the investment NOT be consolidated?
Gamma is located in a country where a military coup has taken place and seized full ownership
of all private entities
On January 1, Year 2, Carlito Company acquired 80% interests in Harries Company for
P2,000,000 cash. The stockholder’s equity of Harries at the time of acquisition is
P1,875,000. On January 1, Year 2, NCI is measured at its implied fair value. The
excess of cost over books value of interest acquired is allocated to the following assets:
Inventorie
P100, 000 (sold in Year 2)
s
Building P200, 000 (5- year remaining
life)
During Year 2, Harries Company reported total comprehensive income of P500,000 and
paid dividend for P100,000.
What is the NCI in net assets of subsidiary on December 31, Year 2?
P552,000
A subsidiary was acquired for cash in a business combination on January 1, Year 1. The
consideration given exceeded the fair value of identifiable net assets. The acquired company
owned equipment with a market value in excess of the carrying amount as of the date of
combination. A consolidated balance sheet prepared on December 31, Year 1, would
Report the unamortized portion of the excess of the market value over the carrying amount of
the equipment as part of plant and equipment
On January 1, Year 2, Carlito Company acquired 80% interests in Harries Company for
P2,000,000 cash. The stockholder’s equity of Harries at the time of acquisition is
P1,875,000. On January 1, Year 2, NCI is measured at its implied fair value. The
excess of cost over books value of interest acquired is allocated to the following assets:
Inventorie
P100, 000 (sold in Year 2)
s
Building P200, 000 (5- year remaining
life)
During Year 2, Harries Company reported total comprehensive income of P500,000 and
paid dividend for P100,000.
What is the consolidated total comprehensive income attributable to parent on
December 31, Year 2, if Carlito’s net income for Year 2 is P600,000?
808,000
On January 1, Year 2, Carlito Company acquired 80% interests in Harries Company for
P2,000,000 cash. The stockholder’s equity of Harries at the time of acquisition is
P1,875,000. On January 1, Year 2, NCI is measured at its implied fair value. The
excess of cost over books value of interest acquired is allocated to the following assets:
Inventorie
P100, 000 (sold in Year 2)
s
Building P200, 000 (5- year remaining
life)
During Year 2, Harries Company reported total comprehensive income of P500,000 and
paid dividend for P100,000.
What was the fair value of NCI on January 1, Year 2?
P500,000
On January 1, 2017, Palm, Inc. purchased 80% of the stock of Stone Corp. for 4,000,000 cash.
Prior to the acquisition, Stone had 100,000 shares of stock outstanding. On the date of
acquisition, Stone’s stock had a fair value of 52 per share. During the year Stone reported
280,000 in net income and paid dividends of 50,000. What is the balance in the noncontrolling
interest account on Palm’s balance sheet on December 31, 2017?
1,086,000
On January 1, Year 2, Owen Corp. purchased all of Sharp Corp.’s common stock for
P1,200,000. On that date, the fair values of Sharp’s assets and liabilities equaled
their carrying amounts of P1,320,000 and P320,000, respectively. During Year 2,
Sharp paid cash dividends of P20,000. Selected information from the separate
balance sheets and income statements of Owen and Sharp as of December 31,
Year 2, and for the year then ended follows:
Owen Sharp
Balance sheet accounts
Investment in subsidiary 1,320,000 -
Retained earnings 1,240,000 560,000
Total stockholders’ equity 2,620,000 1,120,000
Income statement
accounts
Operating income 420,000 200,000
Equity in earnings of Sharp 140,000 -
Net income 400,000 140,000
In Owen’s December 31, Year 2 consolidated balance sheet, what amount should be
reported as total retained earnings?
P1,240,000