S Co Sales P9000 00 P5000 00 Less cost of goods sold 36000 20000 Gross profit

S co sales p9000 00 p5000 00 less cost of goods sold

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S Co Sales P900,0 00 P500,0 00 Less: cost of goods sold 360,00 0 200,00 0 Gross profit P540,0 00 P300,0 00 Less: Depreciation expense 140,00 0 40,000 Other expenses 100,00 0 60,000 Net income P300,0 00 P200,0 00 Non-controlling interest (full-goodwill), December 31, 20x4 P Company P300,0 00 S Company 200,00 0 Total P500,0 00 Less: Non-controlling Interest in Net Income P 0 Amortization of allocated excess (refer to amortization above) 9,625 Goodwill impairment (impairment under full-goodwill approach) _ 0 9,625 Controlling Interest in Consolidated Net Income or Profit attributable to equity holders of parent………….. P490,3 75 45. c Note: Normally, the term used in the requirement “equity in subsidiary income”, is a term used under equity method, but it should be noted that under PAS 27, it prohibits the use of equity method for a parent to consolidate a subsidiary. But, assuming the use of equity method, the answer would be, P190,375. Share in net income: P200,000 x 100% P200,000 Less: Amortization of allocated excess 9,625 P190,375
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46. a Punn’s equity in net income of Sunn (3 months ended,12/31/x6)…… P 200,000 Amortization of cost in excess of book value .............. ( 60,000 ) Increase in Parent’s retained earnings……………………………………. P 140,000 47. a Punn’s net income from own operations, 12 months ended, 12/31/x6 P6,000,000 Add: Increase in RE of Sunn: Punn’s equity in net income of Sunn (3 months ended,12/31/x6)P200,000 Amortization of cost in excess of book value .................. ( 60,000 ) Increase in Parent’s retained earnings……………………………………. P 140,000 Punn’s net income for 20x6 under the equity method……………………… P6,140,000 48. b Full—goodwill Aproach Fair value of Subsidiary (100%) Consideration transferred (80%) …………….. P 180,000 Fair value of NCI (given) (20%) ……………….. 20,000 Fair value of Subsidiary (100%) ………. P 200,000 Less: Book value of stockholders’ equity of Son: Common stock (P100,000 x 100%)………………. P 100,000 Retained earnings (P60,000 x 100%)………... 60,000 160,000 Allocated excess (excess of cost over book value)….. P 40,000 Less: Over/under valuation of assets and liabilities:
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Increase in land (P5,000 x 100%) ……………………. P 5,000 Increase in equipment (P10,000 x 100%) ___10,000 15,000 Positive excess: Increase in Patent (excess of cost over fair value) ……………………………………… ………... P 25,000 A summary or depreciation and amortization adjustments is as follows: Account Adjustments to be amortized Over/ under Li fe Annu al Amou nt Current Year(20 x4) Subject to Annual Amortization Equipment (net) ......... 10,000 5 P 2,000 P 2,000 Patent 25,000 5 5,000 5,000 P 7,000 P 7,000 49. d Investment in Wisden 1/1/x4. 180,000 18,000 Dividends – S (20,0 00 x 90%) NI of S (60,000 x 90%) ……. 54,000 Amor tization 12,600 (P14,000 x 90%) 1/1/x6203,40 0
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50. c 51. a 20x4 Investment income: Dividend of P10,000 x 100% = P10,000 20x4 Investment balance: P500,000 52. b Pedro’s equity in net income of Sanburn – x4 (100% x P80,000).. ………. P 80,000 Less: Amortization of cost in excess of book value Inventory: P20,000 x 100% ……………………………………………….. 20,000 Patent [P500,000 – P380,000 = P120,000 – P20,000 = P100,000) (P100,000/20 years) x 100% .......................................................... 5,000 Investment income – 20x4 (equity method) ………………………………. P 55,000 Investment balance, 1/1/20x4……………………………………………….. P500,000 Add: Pedro’s equity in net income of Sanburn – x4 (100% x P80,000)..
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