CHAPTER-15 - CHAPTER 15 MULTIPLE CHOICE 15-1 a Acquisition...

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CHAPTER 15 MULTIPLE CHOICE 15-1: a Acquisition cost P4,000,000 Less: Book value of interest acquired (100%) 3,200,000 Difference 800,000 Allocation: Property and equipment P(750,000) Other assets 150,000 Long-term debt (200,000) ( 800,000) Goodwill P -0- 15-2: c Acquisition cost P 350,000 Less: Book value of interest acquired (P280,000 x 90%) 252,000 Difference 98,000 Allocation to plant assets (P40,000 x 90%) (36,000) Goodwill P 62,000 15-3: c Plant assets – Pall Company P 220,000 Plant assets – Mall Company 180,000 Consolidated P 400,000 15-4: a Acquisition cost P495,000 Less: Book value of interest acquired (P560,000 – P70,000) 490,000 Difference 5,000 Allocation: Inventory P 25,000 Property and equipment ( 35,000) (10,000 ) Income from acquisition P( 5,000 ) 51
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15-5: b Acquisition cost P355,000 Less: Book value of interest acquired (P320,000 x 80%) 256,000 Difference P 79,000 Allocation: Inventory (P20,000 x 80%) P(16,000) Land (P10,000 x 80%) 8,000 Mortgage payable (P5,000 x 80%) ( 4,000) ( 12,000) Goodwill P 67,000 15-6: a Inventory (P360,000 + P130,000) P490,000 Plant and equipment (P500,000 + P420,000) P920,000 15-7: a Building P180,000 Land P 90,000 15-8: d Son’s stockholders’ equity P400,000 Minority interest proportionate share 20% Minority interest in net assets of subsidiary P 80,000 15-9: d Acquisition cost P160,000 Less: Book value of interest acquired (P145,000 x 75%) 108,750 Difference 51,250 Allocation to accounts payable (P5,000 x 75%) 3,750 Goodwill P 55,000 Therefore: Total assets (P800,000 + P300,000 + P55,000) P1,155,000 Total liabilities (P250,000 + P15,000 + P160,000 + P5,000) 570,000 15-10: b (P900,000 x 1%) 52
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15-11: a Controlling (Parent) interest: Shares acquired (P120,000 / P120) 1,000 shares Divided shares outstanding (P125,000 /P100) ÷1,250 Parent’s interest 80% Minority interest in net assets of subsidiary (P200,000 x 20%) P40,000 15-12: a Goodwill P250,000 Book value of interest acquired (P100,000 / 20%) x 80% 400,000 Investment cost P650,000 15-13: b Net assets on the date of acquisition (P247,095 + P43,605) P290,700 Adjustments of assets excluding goodwill: Inventories P6,630 Plant and equipment 48,450 Patent 7,650 62,730 Net assets at fair value P353,430 15-14: d (P500,000 + P300,000) 15-15: b Acquisition cost P260,000 Less: Book value of interest acquired (P250,000 x 80%) 200,000 Difference 60,000 Allocated to plant and equipment (P50,000 x 80%) (40,000) Goodwill P 20,000 15-16: a ( The retained earnings of the parent only). 15-17: a ( The stockholders’ equity of the parent only). 15-18: b (P50,000 + P10,000) 15-19: d (P380,000 + P150,000) 53
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15-20: d Cash and cash equivalent (P70,000 + P90,000) P 160,000 Inventory (P100,000 + P60,000) 160,000 Property and equipment (P500,000 + P300,000) 800,000 Goodwill 20,000 Total assets P1,140,000 15-21: d Fair value of the reporting unit P 485,000 Fair value of net assets (excluding goodwill) 440,000 Implied goodwill 45,000 Carrying value of goodwill (P450,000 – P390,000)
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This note was uploaded on 08/26/2010 for the course DOA 510 taught by Professor Li during the Spring '10 term at University of Santo Tomas.

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CHAPTER-15 - CHAPTER 15 MULTIPLE CHOICE 15-1 a Acquisition...

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