CHAPTER 16 - CHAPTER 16 MULTIPLE CHOICE 16-1: 16-2: 16-3:...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER 16 MULTIPLE CHOICE 16-1: d, because no impairment of goodwill is recognized. 16-2: d, consolidated net income will decrease due to amortization of the allocated difference which is not the goodwill (P60,000 / 10 years). 16-3: d, computed as follows: Subsidiary’s net income P150,000 Amortization of the allocated difference ( 20,000) Minority interest in net income of subsidiary P130,000 16-4: c Acquisition cost (P500,000 + P40,000) P540,000 Less: Book value of interest acquired 480,000 Difference P 60,000 Cost Method Equity Method Acquisition cost P540,000 P540,000 Parent’s share of subsidiary’s net income - 120,000 Dividends received from subsidiary - ( 48,000) Amortization of allocated difference (P60,000/20) - ( 3,000) Investment account balance, Dec. 31, 2008 P540,000 P609,000 16-5: a Net assets of Sol, January 2, 2008 P300,000 Increase in earnings: Net income P160,000 Dividends paid (P60,000 / 75%) 80,000 80,000 Net assets of Sol, Dec. 31, 2008 P380,000 Minority interest in net assets of subsidiary (P380,000 x 25%) P 95,000 16-6: a Puno’s net income P145,000 Dividend income (P40,000 x 90%) (36,000) Salas’ net income 120,000 Consolidated net income P229,000 65
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
16-7: d Peter’s net income from own operation P1,000,000 Peter’s share of Seller’s net income 200,000 MINIS (P200,000 x 25%) ( 50,000) Consolidated net income attributable to parent P1,150,000 16-8: a 2006 2007 2008 Investment in Son, Jan. 1 P310,000 P396,200 P512,400 Pop’s share of Son’s net income (100%) 150,000 180,000 200,000 Dividends received (100%) ( 60,000) (60,000) ( 60,000) Amortization of allocated difference to Equipment (P38,000 / 10) ( 3,800 ) ( 3,800 ) ( 3,800 ) Investment in Son, Dec. 31 P396,200 P512,400 P648,600 16-9: a Sy’s net income P300,000 Amortization of allocated difference ( 60,000) Adjusted net income of Sy P240,000 Minority interest in net income of subsidiary (P240,000 x 10%) P 24,000 16-10: a . Under the equity method consolidated retained earnings is equal to the retained earnings of the parent company. 16-11: c Retained earnings, Jan. 2, 2008 – Puzon P500,000 Consolidated net income attributable to parent: Net income – Puzon P200,000 Net income – Suarez 40,000 Dividend income (P20,000 x 80%) (16,000) MINIS (P40,000 x 20%) ( 8,000) 216,000 Dividends paid – Puzon ( 50,000) Consolidated retained earnings, Dec. 31, 2008 P666,000 16-12: c Acquisition cost P1,700,000 Less: Book value of interest acquired 1,260,000 Difference P 440,000 Allocation due to undervaluation of net assets ( 40,000) Goodwill ( not impaired) P 400,000 66
Background image of page 2
16-13: d Net assets of Suazon, Jan. 2, 2008 P1,000,000 Increase in earnings (P190,000 – P125,000) 65,000 Net assets of Suazon, Dec. 31, 2008 P1,065,000 Unamortized difference to plant assets (P100,000 – P10,000) 90,000 Adjusted net assets of Suazon, Dec. 31, 2008 P1,175,000 Minority interest in net assets of subsidiary (1,175,000 x 20%) P 231,000 16-14: b Presto’s net income from own operations P140,000 Presto’s share of Stork’s net income (P80,000 – P23,000) 57,000 MINIS (P57,000 x 10%) ( 5,700) Consolidated net income attributable to parent P191,300 16-15: b Investment in Siso stock (at acquisition cost) P600,000 Dividend income (P30,000 x 5%) P 1,500 16-16 d Consolidated net income: Pepe’s net income from own operations P210,000 Sison’s adjusted net income: Net income -2008 P67,000 Amortization of allocated difference to equipment (P20,000 / 5) 4,000 63,000 Consolidated net income P273,000 Consolidated retained earnings : Pepe’s retained earnings, Jan.2, 2007 P701,000 Consolidated net income attributable to parent– 2007 Pepe’s NI from own operations P185,000 Sison’s adjusted NI; Net income – 2007 P40,000 Amortization -2007 4,000 36,000 MINIS (P36,000 x 30%) (10,800 ) 210,200 Dividends paid ,2007 - Pepe ( 50,000) Pepe’s retained earnings, Jan. 2, 2008 P861,200
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 23

CHAPTER 16 - CHAPTER 16 MULTIPLE CHOICE 16-1: 16-2: 16-3:...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online