Consideration transferred Cash 80 P 372000 Fair value of NCI 0

Consideration transferred cash 80 p 372000 fair value

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Consideration transferred: Cash (80%) P 372,000 Fair value of NCI (given) (20%) 93,000 Fair value of Subsidiary (100%) P 465,000 Less: Book value of stockholders’ equity of S (P360,000 x 100%) __360,000 Allocated excess (excess of cost over book value) ….. P 105,000 Add (deduct): (Over) under valuation of assets and liabilities (P90,000 x 100%) 90,000 Positive excess: Full-goodwill (excess of cost over fair value) ………………………………………………... P 15,000 20x4: First Year after Acquisition
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Parent Company Equity Method Entry The following are entries recorded by the P in 20x4 in relation to its subsidiary investment: January 1, 20x4: (1) Investment in S Company……………………………………… …… 372,000 Cash…………………………………… ……………………………….. 372,000 Acquisition of S Company. January 1, 20x4 – December 31, 20x4: (2) Cash……………………… 28,800 Investment in S Company (P36,000 x 80%)……………. 28,800 Record dividends from S Company. December 31, 20x4: (3) Investment in S Company 48,000 Investment income (P60,000 x 80%) 48,000 Record share in net income of subsidiary. December 31, 20x4: (4) Investment income [(P13,200 x 80%) + P3,000*, goodwill impairment loss)] 13,560 Investment in S Company 13,560 Record amortization of allocated excess of inventory, equipment, buildings and bonds payable and goodwill impairment loss.
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Thus, the investment balance and investment income in the books of P Company is as follows: Consolidation Workpaper – First Year after Acquisition The schedule of determination and allocation of excess presented above provides complete guidance for the worksheet eliminating entries on January 1, 20x4: (E1) Common stock S Co………………………………………… 240,000 Retained earnings – S Co…………………………………… 120.000 Investment in Son Co…………………………………………… 288,000 Non-controlling interest (P360,000 x 20%)……………………….. 72,000 (E2) Inventory……………………………………… …………………………. 6,000 Accumulated depreciation – 96,000 Investment in S Cost, 1/1/x4 372,000 28,800 Dividends – S (36,000x 80%) NI of S Amortization & (60,000 x 80%) 48,000 13,560 impairment Balance, 12/31/x4 377,640 Investment Income Amortization & NI of S impairment 13,560 48,000 (P60,000 x 80%) 34,440 Balance, 12/31/x4
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equipment……………….. Accumulated depreciation – buildings………………….. 192,000 Land……………………………………… ………………………………. 7,200 Discount on bonds payable…………………………………………. 4,800 Goodwill………………………………… ………………………………. 12,000 Buildings……………………………… ……….. 216,000 Non-controlling interest (P96,000 x 20%)……………………….. 18,000 Investment in S Co……………………………………………… . 84,000 (E3) Cost of Goods Sold……………. 6,000 Depreciation expense………………………..
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