500000 Allocated Excess P 125000 Less OverUndervaluation of Assets and

500000 allocated excess p 125000 less

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500,000 Allocated Excess.…………………………………………. P 125,000 Less: Over/Undervaluation of Assets and Liabilities (P40,000 + P30,000)……………………. 70,000 Goodwill (Full/Gross-up)..……………………………….. P 55,000 63. e Book value of Stockholders’ Equity of Subsidiary Common stock, 12/31/20x5……………………………… P 300,000 Retained earnings, 12/31/20x5: Retained earnings, 1/1/20x5 …………………..……P260,000 Add: Net income, 20x5………………………………. 120,000 Less: Dividends paid, 20x5…………………………… 50,000 330,000 Book value of Stockholders’ Equity of Subsidiary, 12/31/x5 P 630,000
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Add: Adjustments to reflect fair value (P30,000 + P40,000).. 70,000 Less: Accumulated amortization of allocated excess – 2 yrs 14,000 Fair value of Stockholders’ Equity of Subsidiary. 12/31/x5… P 686,000 Multiplied by: Non-controlling Interest % .............................. 20 % Non-controlling Interest (partial goodwill)………………….. P 137,200 Add: Non-controlling interest in Full Goodwill (P55,000, full – P44,000 partial l) or (P55,00,000 x 20%)*……………………………… 11,000 Non-controlling Interest (full)……………………………… P 148,200 64. e Book value of Stockholders’ Equity of Subsidiary Common stock, 12/31/20x6……………………………… P 300,000 Retained earnings, 12/31/20x6: Retained earnings, 1/1/20x6………………………….P330,000 Add: Net income, 20x6……………………………… 130,000 Less: Dividends paid, 20x6…………………………..60,000 400,000 Book value of Stockholders’ Equity of Subsidiary, 12/31/x6 P 700,000 Add: Adjustments to reflect fair value (P30,000 + P40,000).. 70,000 Less: Accumulated amortization of allocated excess (1/1/20x4 – 12/31/20x6): P7,000 x 3 years…………… 21,000 Fair value of Stockholders’ Equity of Subsidiary. 12/31/x6… P 749,000 Multiplied by: Non-controlling Interest % ............................ 20 %
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Non-controlling Interest (partial goodwill)………………….. P 149,800 Add: Non-controlling interest in Full Goodwill (P55,000, full – P44,000 partial l) or (P55,00,000 x 20%)*……………………………… 11,000 Non-controlling Interest (full)……………………………… P 160,800 * this computation (i.e., P55,000 x 20%) should only be use when the fair value of the non-controlling interest of acquiree (subsidiary) is not given. 65. P542,400 Investment balance, 1/1/20x4……………………………………………….. P500,000 Add: Bell’s equity in net income of Demers – x4 (80% x P100,000).. ……80,000 Less: Dividends (80% x P40,000) ……………………………………………….32,000 Amortization of cost in excess of book value: Equipment: P30,000/10 years x 80%………………………………… 2,400 Building: P40,000/10 years x 80% ................................................. 3,200 Investment balance, equity method, 12/31/20x4…………………………. P542,400 66. c Investment balance, 12/3/20x4……………………………………………….. P542,400 Add: Bell’s equity in net income of Demers – x4 (80% x P120,000).. …… 96,000 Less: Dividends (80% x P50,000) ………………………………………………. 40,000 Amortization of cost in excess of book value: Equipment: P30,000/10 years x 80% ………………………………… 2,400
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Building: P40,000/10 years x 80% ................................................. 3,200 Investment balance, equity method, 12/31/20x5…………………………. P592,800 67. b Investment balance, 12/3/20x5………………………………………………..
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