12000 Discount on bonds payable 1200 Depreci ation Amortiz ation Expense Amorti

12000 discount on bonds payable 1200 depreci ation

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12,000 Discount on bonds payable………………………… 1,200 Depreci ation/ Amortiz ation Expense Amorti zation - Interest Tota l Inventory sold Equipme nt P 12,000 Buildings ( 6,000) Bonds payable _______ P 1,200 Totals P 6,000 P1,200 P7, 200 (E4) Investment income 66,240 Non-controlling interest (P48,000 x 20%) ……………….. 9,600 Dividends paid – S…………………… 48,000 Investment in S Company 27,840 Investment in S Investment Income NI of S 38,400 Dividends - S NI of S (90,000 x 80%) ……. 72,000 Amor tization 5,760 (P7,200 x 80%) Amortization (P7,200 x 80%) 5,760 (90,000 72,000 x 80%) 27,840 66,240
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After the eliminating entries are posted in the investment account, it should be observed that from consolidation point of view the investment account is totally eliminated. Thus, (E5) Non-controlling interest in Net Income of Subsidiary………… 16,560 Non-controlling interest ………….. 16,560 To establish non-controlling interest in subsidiary’s adjusted net income for 20x5 as follows: Net income of subsidiary…………………… .. P 90,000 Amortization of allocated excess [(E3)]…... ( 7,20 0) P 82,800 Multiplied by: Non- controlling interest % .......... 2 0% Non-controlling Interest in Net Income (NCINI) P 16,560 Less: NCI on goodwill impairment loss on full- Goodwill 0 Non-controlling Interest in Net Income (NCINI) P 16,560 Worksheet for Consolidated Financial Statements, December 31, 20x5. Equity Method (Full-goodwill) 80%-Owned Subsidiary December 31, 20x5 (Second Year after Acquisition) Investment in S Cost, 1/1/x5 377,640 38,400 Dividends – S (48,000x 80%) NI of S Amortization (90,000 x 80%) 72,000 5,760 (7,200 x 80%) Balance, 12/31/x5 405,480 307,200 (E1) Investment, 1/1/20x5 70,440 (E2) Investment, 1/1/20x5 27,840 (E4) Investment Income and dividends 405,480 405,480
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Income Statement P Co S Co. Dr. Cr. Consoli dated Sales P540,0 00 P360, 000 P 900,000 Investment income 66,2 40 - (4) 66,240 _____ ______ Total Revenue P606,0 00 P360, 000 P 900,000 Cost of goods sold P216,0 00 P192, 000 P 408,000 Depreciation expense 60,000 24,00 0 (3) 6,000 90,000 Interest expense - - (3) 1,200 1,200 Other expenses 72,000 54,00 0 126,000 Goodwill impairment loss - - - Total Cost and Expenses P348,0 00 P270, 000 P 625,200 Net Income P258,2 40 P 90,00 0 P 274,800 NCI in Net Income - Subsidiary - - (5) 16,560 ( 16,56 0) Net Income to Retained Earnings P258,2 40 P 90,00 0 P 258,240 Statement of Retained Earnings Retained earnings, 1/1 P Company P490,4 40 P490,44 0 S Company P144, 000 (1) 144,00 0
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Net income, from above 258,24 0 90,00 0 258,240 Total P748,6 80 P234, 000 P748,68 0 Dividends paid P Company 72,000 72,000 S Company - 48, 000 (4) 48,000 - Retained earnings, 12/31 to Balance Sheet P676,6 80 P186, 000 P676,68 0 Balance Sheet Cash………………… ……. P 265,20 0 P 102,0 00 P 367,200 Accounts receivable…….. 180,00 0 960,0 00 276,000 Inventory……………… …. 216,00 0 108,0 00 324,000 Land………………… …………. 210,00 0 48,00 0 (2) 7,200 265,200 Equipment 240,00 0 180,0 00 420,000 Buildings 720,00 0 540,0 00 (3) 216,00 0 1,044,0 00 Discount on bonds payable (2) 3,600 (3) 1,200 2,400 Goodwill……………… …… (2) 11,250 11,250 Investment in S Co……… 405, 9480 (1) 307,20 0 (5)70,4 40 (4) -
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27,840 Total P2,236, 680 P1,07 4,000 P2,634, 000 Accumulated depreciation - equipment P 150,00 0 P 102,0 00 (2) 84,000 (3) 12,000 P 180,000 Accumulated depreciation - buildings 450,00 0 306,0 00 (2) 198,00 0 (3) 6,000 552,000 Accounts payable…………… 120,0 00 120, 000 240,000 Bonds payable……………… 240,00 0 120,0 00 360,000 Common stock, P10 par……… 600,00 0 600,000 Common stock, P10 par……… 240,0 00 (1) 240,00 0 Retained earnings, from above 676,68 0 186,0 00 676, 680 Non-controlling interest………… ___ _____ _____ _____ (3) 9,600 ______ ____ (2 ) 76,800 (2) 17,610 (5) 16,560 ______ ____ Total P2,236, 680 P1,07 4,000 P 796,65 0 P 796,65 0 P2,634, 000 Note: Using cost model or equity method, the consolidated net income,
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