00 Stockholders equity Subsidiary Company P 80000 Adjustments

00 stockholders equity subsidiary company p 80000

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00 Stockholders’ equity – Subsidiary Company, December 31, 2015 P 800,00 0 Adjustments to reflect fair value - (over) undervaluation of assets and liabilities, date of acquisition (January 1, 2012) 140,00 0 Amortization of allocated excess (refer to amortization above) – (P15,000 x 4) ( 60,0 00) Fair value of stockholders’ equity of subsidiary, 12/31/ 2015 P 880,00 0 Multiplied by: Non-controlling Interest percentage. 40 Non-controlling interest (partial) P 352,00
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0 Add: NCI on full- goodwill……………………. ____0 Non-controlling interest (full) P 352,00 0 87. c Stockholders’ Equity Common stock - Peer P 724,000 Retained earnings 954, 000 Parent’s Stockholders’ Equity/Equity Attributable to the Owners of the Parent P 1,678,0 00 Non-controlling interest** 352,0 00 Total Stockholders’ Equity (Total Equity) P 985,500 Total Liabilities and Stockholders’ Equity P2,030, 000 88. c Investment in Sea-Breeze Investment Income 1/1/x2. 414,000 42,000 Dividends – S NI of S Retro 111,000 (70,0 00 x 60% NI of S (90,000 x 60%) ……. 54,000 Amor tization 9,000 (P15,000 x 60%) Amortization (P15,000 x 60%) 9,000 (90,000 54,000 x 60%) 12/31/x5528, 000 45,000
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89. c 90. d – refer to No. 78 91. c – refer to No. 78 92. b – refer to No. 78 93. c – refer to No. 81 94. c – refer to No. 81 95. a – not applicable under equity method. 96. d – refer to No. 84 97. d – refer to No. 84 98. d – refer to No. 86 99. c – refer to No. 87 100. a Net income of S (5/1/x5 – 12/31/x5): P840,000 x 8/12 P560,000 Less: Dividend – S (11/1/20x5 – no need to pro-rate) 300,000 Cumulative net income less dividends since date of acquisition, 1/1/20x6 (date to establish reciprocity – not 12/31/x6) P260,000 x: Controlling interests 80 % P208,000 101. b Retained earnings – S Company, 1/1/20x4 P 60,000 Less: Retained earnings – S Company, 12/31/20x6 190,000 Cumulative net income less dividends since date of acquisition, 1/1/20x6 (date to establish reciprocity – should always be beginning of the year, not 12/31/x6) P130,000 x: Controlling interests 90 % P117,000 102. (b) Net income of Subsidiary – 2015 and 2016 (P15,000 + P22,000) …………………………………….P 37,000 Less: Dividends of Subsidiary – 2015 and 2016 (P6,000 + P9,000) ……………………………………... 15,000
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Cumulative net income less dividends since date of acquisition, 1/1/2017 (date to establish reciprocity –should always be beginning of the year, not 12/31/17) / Increase in Retained earnings…………………………………………………………………… …………………... P 22,000 x: Controlling interests……………………………………………………………………… ……………..70 % P 15,400 It should be noted that the amortization/depreciation and any unrealized/realized profits (in case of intercompany sales of inventory/fixed assets) should not be included (refer to next number) as part of the entry to established reciprocity since there will be separate eliminating entry to be made at the end of the year (2017) for amortization and depreciation. Further, the eliminating entry to establish reciprocity for the year 20x7 should be made on January 1, 2017 not December 31, 2017 Incidentally, the entry to convert from cost method to equity method or the entry to establish reciprocity at the beginning of the year, 1/1/2017 would be as follows: Investment in
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