interest 15 x 760000 fair value of subsidiary 123120x4 114000 A summary or

Interest 15 x 760000 fair value of subsidiary

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interest (15% x 760,000, fair value of subsidiary ),12/31/20x4 114,000 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 x5) 20x6 20x7
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Inventory P70,00 0 1 P 70,00 0 P 70,000 P - P - Subject to Annual Amortization Patents 90,000 10 __9,0 00 ___9,00 0 ___9,0 00 ___9,0 00 P160,0 00 P 79,00 0 P 79,000 P 9,000 P 9,000, Unamortized balance of allocated excess: Balance Balance Dec. 31 Amortization Dec. 31 20x4 20x5 20x6 20x6 Inventory 70,000 70,000 Patents 90,000 9,000 9,000 72,000 160,000 79,000 9,000 72,000 1. NCI-CNI 20x5: P(7,350) 20x6: P6,450 20x5 20x6 Consolidated Net Income Net income from own/separate operations Large Company 20x5 [P28,000 – P0)] P 28,000 20x6 [(P45,000, loss + (P15,000 x 85%)] P(57,750) Small Company 30,000 52,000 Total P 58,000 P( 5,750) Less: Non-controlling Interest in Net Income* P(7,350 ) P 6,450 Amortization of 79,000 9,000
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allocated excess Goodwill impairment _____0 71,650 _____ 0 15,450 CI-CNI (loss) or Profit (loss) attributable to equity holders of parent P(13,650 ) P(21,200 ) Add: Non-controlling Interest in Net Income (NCINI) ( 7,350) 6,450 Consolidated Net Income/Loss(CNI) P(21,000) P(14,750) 20x5 20x6 *Net income (loss) of subsidiary P 30,000 P 52,000 Amortization of allocated excess ( 79,000) ( 9,000 ) P(49,000 ) P43,00 0 Multiplied by: Non-controlling interest % .......... 15% 15% P(7,350) P 6,450 Less: Non-controlling interest on impairment loss on full-goodwill _______- ___ _- Non-controlling Interest in Net Income (NCINI) P( 7,350) P6,450 *this procedure would be not be applicable where the NCI on goodwill impairment loss would not be proportionate to NCI acquired. 2. CI-CNI – refer to computation in No. 1 20x5: P(21,000) 20x6: P14,750 Or, alternatively: (1) Non-controlling interest in profit 20x5: 15% (30,000 – 79,000) ............................................................. 7,350
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20x6: 15% (52,000 – 9,000) ............................................................... 6,450 (2) 20x5 20x6 NI (loss) Pen 28,000 (45,000) Less: Dividends from Silk 20x5 0 20x6 (85% 15,000) (12,750 ) 28,000 (57,750) Share of Silk’s profit 85% (30,000 – 79,000) (41,650) 85% (52,000 – 9,000) ________ 36,550 _ Consolidated profit (loss) attributable to Pen’s shareholders (13,650 ) (21,200 ) 3. CRE, 12/31/20x6 – P73,150 Consolidated Retained Earnings, December 31, 20x6 Retained earnings - Pen Company, December 31, 20x6 (cost model P 91,000 Adjustment to convert from cost model to equity method for purposes of consolidation or to establish reciprocity:/Parent’s share in adjusted net increased in subsidiary’s retained earnings: Retained earnings – Silk, December 31, 20x6: (P100,000 + P30,00 – P0 + P52,000 – P15,000) P 167,000 Less: Retained earnings – Silk, December 31, 20x4 (date of acquisition) 100,0 00 Increase in retained earnings since date of acquisition P 67,000 Less: Amortization of allocated excess – 20x5 79,000
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Amortization of allocated excess – 20x6 __9,000 P (21,000 ) Multiplied by: Controlling interests % ................... 85% P (17,850 ) Less: Goodwill impairment loss (full- goodwill) – 20x5 _____0 ( 17,85 0) Consolidated Retained earnings, December 31, 20x6 P 73,150 4. NCI, 12/31/20x6: P110,850 FV of SHE of Silk: Common stock, 12/31/20x6 P 500,000 Retained earnings, 12/31/20x6: Retained earnings, 1/1/20x4 P 100,000 NI – Subsidiary (20x5 and 20x6): P30,000 + P52,000 82,000 Dividends – Subsidiary (20x5 and 20x6): P0 + P15,000( 15,000) 167,000 Book value of SHE – S, 12/31/20x6 P 667,000 Adjustments to reflect fair value, 12/31/20x4 160,000 Amortization of allocated excess (P79,000 + P9,000) ( 88,000) FV of SHE of S P 739,000 Multiplied by: NCI% _____15 % FV of NCI (partial), 12/31/20x6 P 110,850 Add: NCI on full-goodwill ______ _0 FV of NCI (full),12/31/20x6 P 110,850 Or, alternatively: Non-controlling interest – date of acquisition,12/31/20x4 (1) P114,000
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Retained earnings Silk – Dec. 31, 20x6 (100,000 + 30,000 + 52,000 – 15,000) P167,000
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