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

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

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:

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

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)..