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

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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 NCI proportionate share 30% NCI in net income of subsidiary P 21,000 18-3: b 2005 2006 Net income from own operations – Prime P200,000 P250,000 Unrealized gain – Downstream (30,000 ) __ - Adjusted 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 NCI 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 Attributable to NCI (P180,000 x 20%) (36,000) Attributable to parent P314,000 18-9: b NCI, January 1, 2009 (P1,000,000 x 20%) P 200,000 NCI in dividends paid by subsidiary (P30,000 x 20%) ( 6,000) NCI in net of subsidiary (P65,00 x 20%) 13,000 NCI, December 31, 2009 P 207,000 18-10: c 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 Adjusted 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 Attributable to NCI (P28,000 x 20%) 5,600 Attributable to parent P230,100 101
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18-10, Continued: Non-controlling interest (NCI) NCI, January 1, 2009 [(P1,240,000/80%) x 20%) P 310,000 NCI share in dividends paid by subsidiary (P30,000 x 20%) ( 6,000) NCI in adjusted net income (loss) of subsidiary ( 5,600) NCI, December 31, 2009 P 198,400 18-11: a Net assets, Dec. 31, 2009 NCI ,Dec. 31, 2009 (based on fair value of net assets) P188,960 Add: NCI share of unrealized profit in ending inventory -Upstream (P36,000 x 20%) x 20% 1,440 NCI share of unrealized gain on sale of equipment- Upstream (P60,000 x 20%) – (P12,000 / 5) 9,600 NCI before adjustment P200,000 Net assets – Steve, Dec.31, 2009 (P200,000 / 20%) P1,000,000 Investment in Steve Company stock – Equity method Investment cost: Net assets, Dec. 31, 2009 P1,000,000 Less net income – steve NCI P36,960 NCI share of unrealized profit in ending Inventory – Upstream 1,440 BCI share of unrealized gain on sale of Equipment – Upstream 9,600 NCI per book P48,000 Divided by 20% 240,000 Net assets, Jan. 1, 2009 P 760,000 Parent’s proportionate share x 80% Book value of interest acquired P 608,000 Add: difference 20,000 Price paid 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) Unrealized gain on sale of equipment – Upstream (P48,000 – 9,600) ( 38,400) Investment in Steve Company, Dec. 31, 2009 P 771,840 102
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18-12: a Net income from own operations – Pipe P400,000 Adjusted net income - Smoker Net income
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