Realized gain on sale of equipment downstream sales through depreciation 250 00

Realized gain on sale of equipment downstream sales

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Realized gain on sale of equipment (downstream sales) through depreciation 25,0 00 P Company’s realized net income from separate operations…….….. P3,295,000 S Company’s net income from own operations…………………………………. P820,000 Realized gain on sale of equipment (upstream sales) through depreciation 0 S Company’s realized net income from separate operations…….….. P 820,000 820,000 Total P4,115,000 Less: Non-controlling Interest in Net Income* * P 164,000 Amortization of allocated excess…………………… 0 164,000 Controlling Interest in Consolidated Net Income or Profit attributable to equity holders of parent………….. P3,951,000 Add: Non-controlling Interest in Net Income (NCINI) _169,000 Consolidated Net Income for 20x5 P4,115,000 **Non-controlling Interest in Net Income (NCINI) for 20x5 S Company’s net income of Subsidiary Company from its own operations (Reported net income of S Company) P 820,000 Realized gain on sale of equipment (upstream sales) through depreciation 0 S Company’s realized net income from separate operations……… P 820,000 Less: Amortization of allocated excess 0 P820,000 Multiplied by: Non-controlling interest % .......... 20% Non-controlling Interest in Net Income (NCINI) – partial goodwill P 164,000 B. Upstream Sale 1. Cost Model – 20x5 (104,000/130,000 = 80% ownership) Dividends – S Company Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,000 Dividend income (P60,000 x 80%) . . . . . . . . . . . . . . . . . . . . . . . 48,000 Net Income – S Company No entry Amortization of Allocated Excess No entry Unrealized Gain on Sale of Equipment No entry Realized Gain on Sale – depreciation No entry Equity Method – 20x5
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Dividends – S Company Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,000 Investment in S Co (60,000 x 80%) . . . . . . . . . . . . . . . . . . . . . . . 32,000 Net Income – S Company Investment in S Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 656,000 Investment income (P820,000 x 80%). . . . . . . . . . . . . . . . . . . . . 656,000 Amortization of Allocated Excess None, since there is no amount available Unrealized Gain on Sale of Equipment No entry 1/1/20x4 Selling price……………………………………… P740,000 Less: Book value: Cost…………………………………………P 1,280,000 Less: Accumulated depreciation P1,280,000/8 years x 4 years……. 640,000 640,000 Unrealized gain on sales………………………. P 100,000 Realized gain on sale thru depreciation based on remaining life of equipment [P100,000 / (8 – 4, expired years)……… P 25,000 Realized Gain on Sale – depreciation 25,000 Investment in S Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment income (P25,000 x 100%). . . . . . . . . . . . . . . . . . . . . 25,000 2. Working Paper Elimination Entries: Cost Model Equipment 540,000 Beginning R/E – Prince (P100,000 × .80) 80,000 Noncontrolling Interest (P100,000 × .20) 20,000 Accumulated Depreciation 640,000 Accumulated Depreciation (P100,000/4) × 2 50,000 Depreciation Expense 25,000 Beginning R/E – Prince (P25,000 × .80) 20,000 Noncontrolling Interest (P25,000 × .20) 5,000 Equity Method Equipment 540,000 Investment in S Co. (P100,000 × .80) 80,000 Noncontrolling Interest (P100,000 × .20) 20,000
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Accumulated Depreciation 640,000 Accumulated Depreciation (P100,000/4) × 2 50,000 Depreciation Expense 25,000 Investment in S Co. (P25,000 × .80) 20,000 Noncontrolling Interest (P25,000 × .20) 5,000 3 Controlling Interest in Consolidated Net Income: Prince Company’s income from its independent operations P3,270,000 Reported net income of Serf Company P820,000 Plus profit on intercompany sale of equipment considered to be realized through depreciation in 20x4 25,000 Reported subsidiary income that has been
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