Depreciati on Amortizati on expense Amortizat ion Interest Inventor y sold P

Depreciati on amortizati on expense amortizat ion

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Depreciati on/ Amortizati on expense Amortizat ion -Interest Inventor y sold P 6,000 Equipme nt 12,000 P 12,000 Building s (6,000 ) ( 6,000) Bonds payable 1,2 00 _______ _ P 1,200 Sub-total P13,20 0 P 6,000 P 1,200 Multiplie d by: 80 % To Retained earnings P 10,560 Impairm ent loss 3,0 00 Total P 13,560 (E5) Dividend income - P………. 38,400 Non-controlling interest (P48,000 x 20%) ……………….. 9,600 Dividends paid – S…………………… 48,000 To eliminate intercompany dividends and
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non-controlling interest share of dividends. (E6) 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 90,00 0 Amortization of allocated excess [(E4)]…... ( 7, 200) P 82,80 0 Multiplied by: Non- controlling interest % .......... 20% Non-controlling Interest in Net Income (NCINI P 16,56 0 Worksheet for Consolidated Financial Statements, December 31, 20x5. Cost Model (Partial-goodwill) 80%-Owned Subsidiary December 31, 20x5 (Second Year after Acquisition) Income Statement P Co S Co. Dr. Cr. Consolid ated Sales P540,0 00 P360,0 00 P 900,000 Dividend income 38,4 00 - (5) 38,400 ______ _____ Total Revenue P578,4 00 P360,0 00 P 900,000 Cost of goods sold P216,0 P192,0 P
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00 00 408,000 Depreciation expense 60,000 24,000 (4) 6,000 90,000 Interest expense - - (4) 1,200 1,200 Other expenses 72,000 54,000 126,000 Goodwill impairment loss - - - Total Cost and Expenses P348,0 00 P270,0 00 P 625,200 Net Income P230,4 00 P 90,000 P 274,800 NCI in Net Income - Subsidiary - - (6) 16,560 ( 16,56 0) Net Income to Retained Earnings P230,4 00 P 90,000 P 258,240 Statement of Retained Earnings Retained earnings, 1/1 P Company P484,8 00 (2)13,5 60 (1)19,2 00 P 490,440 S Company P 144,00 0 (2) 144,0 00 Net income, from above 230,40 0 90,000 258,24 0 Total P715,2 00 P234,0 00 P 748,680 Dividends paid P Company 72,000 72,00 0 S Company - 48,0 00 (5) 48,000 _ _______ _ Retained earnings, 12/31 to Balance P643,2 00 P186,0 00 P 676,680
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Sheet Balance Sheet Cash………………… ……. P 265,20 0 P 114,00 0 P 367,200 Accounts receivable…….. 180,00 0 96,000 276,000 Inventory…………… ……. 216,00 0 108,00 0 (3) 6,000 (4) 6,000 324,000 Land……………… ……………. 210,00 0 48,000 (3) 7,200 265,200 Equipment 240,00 0 180,00 0 420,000 Buildings 720,00 0 540,00 0 (3) 216,00 0 1,044,00 0 Discount on bonds payable (3) 4,800 (4) 2,400 2,400 Goodwill…………… ……… (3) 12,000 (4) 3,000 9,000 Investment in S Co……… 372,0 00 (1) 19,200 (2) 307,20 0 (3) 84,000 - Total P2,203 ,200 P1,074 ,000 P2,707,8 00 Accumulated depreciation - equipment P 150,00 0 P 102,00 0 (3) 96,000 (4) 24,000 P180,00 0 Accumulated depreciation - buildings 450,00 0 306,00 0 (3) 192,000 (4) 12,000 552,000 Accounts payable…………… 120,0 00 120,0 00 240,000
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Bonds payable…………… …… 240,00 0 120,00 0 360,000 Common stock, P10 par……… 600,00 0 600,000 Common stock, P10 par……… 240,00 0 (2) 240,000 Retained earnings, from above 643,20 0 186,00 0 676,680 Non-controlling interest………… ___ _____ ___ ______ (5) 9,600 (4) 2,640 _______ ___ (2 ) 76,800 (3) 18,000 (6) 16,560 ____99, 120 Total P2,203 ,200 P1,074 ,000 P 821,160 P 821,1 60 P2,707,8 00 5. 1/1/20x4 a. On date of acquisition the retained earnings of P should always be considered as the consolidated retained earnings, thus: Consolidated Retained Earnings, January 1, 20x4 Retained earnings - P Company, January 1, 20x4 (date of acquisition) P360,00 0 b. Non-controlling interest (partial-goodwill), January 1, 20x4 Common stock – S Company, January 1, 20x4…… P 240,000 Retained earnings – S Company, January 1, 20x4 120,000 Stockholders’ equity – S Company, January 1, 20x4 P 360,000 Adjustments to reflect fair value - (over)
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undervaluation of assets and liabilities, date of acquisition (January 1, 20x4) 90,000
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