72960 Amortization 13560 impairment Amortization impairment 13560 91200 72960 x

72960 amortization 13560 impairment amortization

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72,960 Amortization & 13,560 impairment Amortization impairment 13,560 (91,200 72,960 x 80%) Realized gain* 2,250 15,000 Unrealized gain * Unrealized gain * 15,000 2,250 Realized gain* Realized gain** 3,120 24,960 Unrealized gain ** Unrealized gain **24,960 3,120 Realized gain** 3,990 24,810 Investment in S Cost, 1/1/x4 372,000 28,800 Dividends – S (36,000x 80%) NI of S Amortization & (91,200 x 80%) 72,960 13,560 impairment Realized gain downstream sale 2,250 15,000 Unrealized gain downstream sale Realized gain upstream sale 3,120 24,960 Unrealized gain upstream sale Balance, 12/31/x4 368,010 288,000 (E1) Investment, 1/1/20x4 (E4) Investment Income and dividends …………… 3,990 84,000 (E2) Investment, 1/1/20x4 372,000 372,000
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(P15,000 / 5 years x 9/12 = P2,250). (E8) Accumulated depreciation……….. 3,900 Depreciation expense…………… 3,900 To adjust upstream depreciation expense on equipment sold to parent, thus realizing a portion of the gain through depreciation (P31,120/85 years x 1 year = P3,900). (E9) Non-controlling interest in Net Income of Subsidiary………… 9,390 Non-controlling interest ………….. 9,390 To establish non-controlling interest in subsidiary’s adjusted net income for 20x4 as follows: Net income of subsidiary…………………….. P 91,200 Unrealized gain on sale of equipment (upstream sales) ( 31,200) Realized gain on sale of equipment (upstream sales) through depreciation 3,900 S Company’s realized net income from separate operations P 63,900 Less: Amortization of allocated excess [(E3)]…. 13,200 P 50,700 Multiplied by: Non-controlling interest % .......... 20% Non-controlling Interest in Net Income (NCINI) – partial goodwill P 10,140 Less: Non-controlling interest on impairment loss on full-goodwill (P3,750 x 20%) or (P3,750 impairment on full-goodwill less P3,000, impairment on partial-goodwill)* 750 Non-controlling Interest in Net Income (NCINI) – full goodwill P 9,390 Worksheet for Consolidated Financial Statements, December 31, 20x4. Equity Method (Full-goodwill) 80%-Owned Subsidiary December 31, 20x4 (First Year after Acquisition) Income Statement P Co S Co. Dr. Cr. Consolidate d Sales P480,000 P240,00 0 P 720,000 Gain on sale of equipment 15,000 31,200 (5) 15,000 (6) 31,200 Investment income 24,810 - (4) 28,800 _________ Total Revenue P519,810 P271,20 0 P 720,000 Cost of goods sold P204,000 P138,00 0 (3) 6,000 P 348,000 Depreciation expense 60,000 24,000 (3) 6,000 (7) 2,250 (8) 3,900 83,850 Interest expense - - (3) 1,200 1,200 Other expenses 48,000 18,000 66,000
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Goodwill impairment loss - - (3) 3,750 3,750 Total Cost and Expenses P312,000 P180,00 0 P 502,800 Net Income P207,810 P 91,200 P 217,200 NCI in Net Income - Subsidiary - - (9) 9,390 ( 9,390) Net Income to Retained Earnings P207,810 P 91,200 P 207,810 Statement of Retained Earnings Retained earnings, 1/1 P Company P360,000 P 360,000 S Company P120,00 0 (1) 120,000 Net income, from above 207,810 91,20 0 207,810 Total P567,810 P211,20 0 P 567,810 Dividends paid P Company 72,000 72,000 S Company - 36,00 0 (4) 36,000 _ ________ Retained earnings, 12/31 to Balance Sheet P495,810 P175,20 0 P 495,810 Balance Sheet Cash………………………. P 232,800 P 90,000 P 322,800 Accounts receivable…….. 90,000 60,000 150,000 Inventory…………………. 120,000 90,000 (2) 6,000 (3) 6,000 210,000 Land……………………………. 210,000 48,000 (2) 6,000 265,200 Equipment 240,000 180,000 (5) 30,000 (6) 12,000 462,000 Buildings 720,000 540,000 (2) 216,000 1,044,000 Discount on bonds payable (2) 4,800 (3) 1,200 3,600 Goodwill…………………… (2) 15,000 (3) 3,750 11,250 Investment in S Co……… 368,010 (1) 288,000 (2) 84,000 - Total P1,980,810 P1,008,0 00 P2,468,850 Accumulated depreciation - equipment P 135,000 P 96,000 (2) 96,000 (7) 2,250 (8) 3900 (3) 12,000 (5) 45,000 (6) 43,200 P229,050 Accumulated depreciation - buildings 405,000 288,000 (2) 192,000 (3) 6,000 495,000 Accounts payable…………… 105,000 88,800 193,800 Bonds payable………………… 240,000 120,000 360,000
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