Subsidiary 15400 Retained earning Parent Company 112017 15400 103 a Net income

Subsidiary 15400 retained earning parent company

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Subsidiary………………………………………………………………… 15,400 Retained earning – Parent Company, 1/1/2017………………………………. 15,400 103. (a) Net income of Subsidiary – 2015 and 2016 (P15,000 + P22,000) ……………………………………. P 37,000 Less: Dividends of Subsidiary – 2015 and 2016 (P6,000 + P9,000) …………………………………… 15,000
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Increase in Retained earnings for 2 years……………………………………………………………… P 22,000 Less: Amortization of allocated excess [(P80,000 – P60,000)/10 years x 2 years]………………… 4,000 P 18,000 x: Controlling interests……………………………………………………………………… ………………. 70 % Retroactive amount, December 31, 20x6 or January 1, 2017……………………………………… P 12,600 104. b [{(P84,000 + P105,000) - [(P310,000 - P220,000)/20]2} - (P30,000 + P50,000)].8 105. a - under the cost model share in net income or earnings of subsidiary does not affect investment. 106. d Investment account, December 31, 20x7: Original investment …………………………………………..P 550,000 Tiny’s earnings, 20x4-20x77: 100% x P166,000…………… 166,000 Less: Dividends received: 100% x P114,000……………… 114,000 Balance, December 31, 20x7……………………………..P602,000 107. a The adjusting entry required in 20x7 to convert from the cost to the equity methodis: Investment in Tiny………………………………….52,000 Retained earnings beg………………………….. 4,000 Dividend revenue………………………………… 54,000 Equity in subsidiary income of Tiny……. 110,000
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108. d – P45,000/15% = P300,000 109. d Pigeon’s separate income P150,0 00 Less: 60% of Home’s P10,000 loss = 6,000 Less: Equipment depreciation P10,000/ 10 years = __1,00 0 Controlling Interest in Consolidated Net Income P143,0 00 Add: NCI in CNI NL of S Company P( 10,000) Less: Amortization of allocated excess (P1,000/60%) 1,667 P (11,667) Multiplied by: NCI% 40% ( 4,667) Consolidated Net Income P138,333 110. a Non-controlling Interest in Net Income (NCINI) for Year 3 Net income of S Company P240,0 00 Less: Amortization of allocated excess 45,000 P195, 000 Multiplied by: Non-controlling interest % .......... 30% Non-controlling Interest in Net Income (NCINI) for Year 3 P 58,500 111. c Net income from own/separate operations P Company P 375,00 0
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S Company 30,000 Total P405,0 00 Less: Non-controlling Interest in Net Income* P5,250 Amortization of allocated excess (refer to amortization above) 3,750 Goodwill impairment (impairment under full-goodwill approach) 0 9,000 Controlling Interest in Consolidated Net Income or Profit attributable to equity holders of parent………….. P396,0 00 *Non-controlling Interest in Net Income (NCINI) for 20x4 Net income of S Company P30,00 0 Less: Amortization of allocated excess** 3,750 P26,2 50 Multiplied by: Non-controlling interest % .......... 20% Non-controlling Interest in Net Income (NCINI) for 20x4 P 5,250 **P270,000/80% = P337,500 – (P150,000 + P150,000) = P37,500 / 10 years = P3,750 Note: Whether the partial or full-goodwill approach are used the amortization of excess are always the same.
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