CHAPTER 18 - CHAPTER 18 MULTIPLE CHOICE 18-1: a Equipment...

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CHAPTER 18 MULTIPLE CHOICE 18-1: a Equipment – at original cost P500,000 Accumulated depreciation : Time of sale P250,000 Current depreciation based on Original cost (P500,000/10 years 50,000 P300,000 18-2: b Net income – Sol P100,000 Unrealized gain on sale of computer, Dec. 31 ( 30,000 ) Adjusted net income P 70,000 Minority interest proportionate share 30% Minority interest in net income of subsidiary (MINIS) P 21,000 18-3: b 2005 2006 Net income from own operations – Prime P200,000 P250,000 Unrealized gain – Downstream (30,000 ) __ - Realized net income – Prime P170,000 P250,000 Second Company net income 100,000 150,000 Consolidated net income P270,000 P400,000 18-4: c Net income – Saw P100,000 Unrealized loss-Upstream 12,000 Realized loss ((P12,000 / 5) x 6/12 ( 1,200) Adjusted net income – Saw P110,800 Minority interest in net income of subsidiary (P110,800 x 25%) P 27,700 18-5: c Equipment – at original cost P1,000,000 Accumulated depreciation: Time of sale P360,000 Current depreciation (P900,000/10) 90,000 P 450,000 100
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18-6: a Adjusted net income – Susie (P12,000 / 40%) P 30,000 Add back: Unrealized gain – Upstream 90,000 Net income of Susie – 2008 P120,000 18-7: a Original cost P100,000 Amount debited to Truck account (48,000) Selling price of the truck – Amount paid P 52,000 18-8: c Net income – Po P200,000 Unrealized gain, Dec. 31 – DS (30,000) Net income from own operation – Po 270,000 Net income of So 180,000 Consolidated net income, Dec. 31, 2008 P350,000 MINIS (P180,000 x 20%) (36,000) Attributable to parent P314,000 18-9: b Stockholders’ equity, Jan. 1, 2008 – Sy P1,000,000 Increase in earnings – 2008 (P65,000 – P30,000) 35,000 Stockholders’ equity, Dec. 31, 2008 – Sy P1,035,000 Minority interest in net assets of subsidiary (P1,035,000 x 20%)P 207,000 18-10: b Consolidated net income attributable to parent: Net income – Pink P300,000 Unrealized gain, July 1- Downstream ( 50,000) Realized gain, Dec. 31 (P50,000 / 10) x 6/12 2,500 Realized net income – Pink P252,500 Soda’s adjusted net loss: Net loss P(40,000) Unrealized loss, 1/1 – Upstream 15,000 Realized loss, 12/31 (P15,000/5) ( 3,000) (28,000) Consolidated net income, Dec. 31, 2008 P224,500 MI in net loss of subsidiary (P28,000 x 20%) 5,600 Attributable to parent P230,100 101
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Minority interest in net assets of subsidiary Net assets, Jan. 1, 2008 (P1,240,000 / 80%) P1,550,000 Decrease in earnings: Net loss P40,000 Dividends paid 30,000 ( 70,000 ) Net assets, Dec. 31, 2008 P1,480,000 Unrealized loss, Dec. 31 (Upstream) ( 12,000 ) Adjusted net assets, Dec. 31, 2008 P1,468,000 Minority interest in net assets of subsidiary (P1,468,000 x 20%)P 293,60 0 18-11: a Net assets, Dec. 31, 2008 Minority interest, Dec. 31, 2008 P188,960 Add: MI share of unrealized profit in ending inventory -Upstream (P36,000 x 20%) x 20% 1,440 MI share of unrealized gain on sale of equipment- Upstream (P60,000 x 20%) – (P12,000 / 5) 9,600 Minority interest before adjustment P200,000 Net assets – Steve, Dec.31, 2008 (P200,000 / 20%) P1,000,000 Investment in Steve Company stock – Equity method Acquisition cost: Net assets, Dec. 31, 2008 P1,000,000 Less: net income – steve MINIS P36,960 MI share of unrealized profit in ending Inventory – Upstream 1,440 MI share of unrealized gain on sale of Equipment – Upstream 9,600 MINIS per book P48,000 Divided by 20% 240,000 Net assets, Jan. 1, 2008 P 760,000 Parent’s proportionate share x 80% Book value of interest acquired P 608,000 Add: difference 20,000 Purchase price (acquisition cost) P 628,000 Add: Investment income Peter’s share of Steve net income (P240,000 x 80%) P 192,000 Unrealized profit in ending inventory – Downstream (P24,000 x 20%/120%) x 100% ( 4,000) Unrealized profit in beginning inventory – Upstream (P36,000 x 25/125%) x 80% ( 5,760)
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CHAPTER 18 - CHAPTER 18 MULTIPLE CHOICE 18-1: a Equipment...

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