600 Interest expense 120 Goodwill impairment loss 375 Inventory 6000

600 interest expense 120 goodwill impairment loss 375

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6,00 0 Interest expense………………………………… 1,20 0 Goodwill impairment loss………………………………………. 3,75 0 Inventory……………………………………… ………………….. 6,000
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Accumulated depreciation – equipment……………….. 12,00 0 Discount on bonds payable………………………… 1,200 Goodwill…………………………………… 3,750 Cost of Goods Sold Depreciation/ Amortization Expense Amortizatio n -Interest Inventory sold P 6,000 Equipment P12,000 Buildings ( 6,000) Bonds payable _______ _______ P 1,200 Totals P 6,000 P 6,000 P1,200 (E4) Dividend income - P………. 28,800 Non-controlling interest (P36,000 x 20%) ……………….. 7,200 Dividends paid – S…………………… 36,000 (E5) Non-controlling interest in Net Income of Subsidiary………… 8,610 Non-controlling interest ………….. 8,610 Net income of subsidiary………………… ….. P 60,000 Amortization of allocated excess [(E3)]…... ( 13,20 0) P 46,800 Multiplied by: Non- controlling interest % .......... 2 0% P
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9,360 Less: Non-controlling interest on impairment loss on full-goodwill (P3,125 x 20%) or (P3,125 impairment on full-goodwill less P2,500, impairment on partial-goodwill)* 750 Non-controlling Interest in Net Income (NCINI) P 8,610 *this procedure would be more appropriate, instead of multiplying the full-goodwill impairment loss of P3,125 by 20%. There might be situations where the NCI on goodwill impairment loss would not be proportionate to NCI acquired (refer to Illustration 15-6). Worksheet for Consolidated Financial Statements, December 31, 20x4. Cost Model (Full-goodwill) 80%-Owned Subsidiary December 31, 20x4 (First Year after Acquisition) Income Statement P Co S Co. Dr. Cr. Consolidate d Sales P480,00 0 P240,00 0 P 720,000 Dividend income 28,800 - (4) 28,800 _________ Total Revenue P508,80 0 P240,00 0 P 720,000 Cost of goods sold P204,00 0 P138,00 0 (3) 6,000 P 348,000 Depreciation expense 60,000 24,000 (3) 6,000 90,000 Interest expense - - (3) 1,200 1,200 Other expenses 48,000 18,000 66,000 Goodwill impairment - - (3) 3,750 3,750
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loss Total Cost and Expenses P312,00 0 P180,00 0 P508,950 Net Income P196,80 0 P 60,000 P211,050 NCI in Net Income - Subsidiary - - (5) 8,610 ( 8,610) Net Income to Retained Earnings P196,80 0 P 60,000 P202,680 Statement of Retained Earnings Retained earnings, 1/1 P Company P360,00 0 P 360,000 S Company P120,00 0 (1) 120,00 0 Net income, from above 196,800 60,000 202,680 Total P556,80 0 P180,00 0 P562,440 Dividends paid P Company 72,000 86,400 S Company - 36,000 (4) 36,000 _ ________ Retained earnings, 12/31 to Balance Sheet P484,80 0 P144,00 0 P 490,440 Balance Sheet
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Cash……………… ………. P 232,80 0 P 90,000 P 322,80 0 Accounts receivable…….. 90,000 60,000 150,00 0 Inventory………… ………. 120,00 0 90,000 (2) 6,000 (3) 6,000 210,00 0 Land……………… ……………. 210,00 0 48,000 (2) 7,200 265,20 0 Equipment 240,00 0 180,00 0 420,00 0 Buildings 720,00 0 540,00 0 (2) 216,000 1,044,0 00 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……… 372,0 00 (3) 288 ,000 (4)84,000 - Total P1,984 ,800 P1,008 ,000 P2,426, 850 Accumulated depreciation - equipment P 135,00 0 P 96,000 (2) 96,000 (3) 12,000 P147,0 00 Accumulated depreciation - buildings 405,00 0 288,00 0 (5) 192,00 0 (6) 6,000 495,00 0 Accounts payable…………… 120, 000 120,0 00 240,00 0 Bonds payable…………… …… 240,00 0 120,00 0 360,00 0 Common stock, P10 600,00 600,00
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par……… 0 0 Common stock, P10 par……… 240,00 0 (1) 240,000 Retained earnings, from above 484,80 0 144,0 00 490,44 0 Non-controlling interest………… _____ ____ ___ _____ _ (7) 7,200 _______ ___ (1 ) 72,000 (2) 21,000 (5) 8,610 ____9 4,410 Total P1,984 ,800 P1,984 ,800 P 748,560 P 748,560 P2,426, 850 20x5: Second Year after Acquisition P Co. S Co.
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