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  • Exercise Answers - Consolidated FS - Statement of Financial Position

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    John Philip L Concepcion
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    A subsidiary was acquired for cash in a business combination on January 1, 2017. 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.

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    A subsidiary was acquired for cash in a business combination on January 1, 2017. 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.

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    716 views3 pages

    Exercise Answers - Consolidated FS - Statement of Financial Position

    Uploaded by

    John Philip L Concepcion
    A subsidiary was acquired for cash in a business combination on January 1, 2017. 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.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    A subsidiary was acquired for cash in a business combination on January 1, 2017.

    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 

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