Less Retained earnings 123120x4 date of acquisition100000 Increase since

Less retained earnings 123120x4 date of

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Less: Retained earnings, 12/31/20x4 (date of acquisition)100,000 Increase since acquisition P 67,000 Less: Amortization of allocated excess (79,000 + 9,000)88,000 P( 21,000) Multiplied by: NCI’s share ____ 15% ( 3,150) Non-controlling interest (full) 12/31/20x6 P 110,850 5. Consolidated Patents, 12/31/20x6: P72,000 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 Or, alternatively: Invest. account – equity Dec. 31, 20x6 628,150 Cost of investment, cost model 646,000 Retained earnings Silk – Dec. 31, 20x6 (100,000 + 30,000 + 52,000 – 15,000)167,000 Retained earnings,12/31/20x4 (date of acquisition)100,000 Increase since acquisition 67,000 Less: Accumulated amortization (79,000 + 9,000) 88,000 ( 21,000) Multiplied by: CI share 85% (17,850) Invest. account – equity method as at Dec. 31, 20x6 628,150 Implied value of 100% (628,150 / 85%) 739,000 Silk –Common shares 500,000 Retained earnings – Silk, 12/31/20x6 167,000 667,000 Balance unamortized allocated excess – Patents 72,000
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Problem IV Additional information: Parent’s net income from own operations - 20x4, P100,000; 20x5, P120,000 Parent’s dividend declared – 20x4, P30,000; 20x5, P40,000 1. NCNCI for 20x4, P8,400; NCNCI for 20x5, P12,020 20x4 Consolidated Net Income for 20x4 Net income from own/separate operations Parent – Davis Company P100,00 0 Subsidiary - Martin Company 60,000 Total P160,00 0 Less: Non-controlling Interest in Net Income* P 8,400 Amortization of allocated excess** 18,000 Goodwill impairment _______ 0 __26,400 Controlling Interest in Consolidated Net Income or Profit attributable to equity holders of parent………….. P133,60 0 Add: Non-controlling Interest in Net Income (NCINI) ___8,400 Consolidated Net Income for 20x4 P142,00 0 *Net income of subsidiary – 20x4 P 60,000 Amortization of allocated excess – 20x4 (P2,000 + P16,000) ( 18,000) P 42,000 Multiplied by: Non-controlling interest % .......... 20 % P 8,400
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Less: Non-controlling interest on impairment loss on full- goodwill _______ 0 Non-controlling Interest in Net Income (NCINI) P 8,400 *this procedure would be not be applicable where the NCI on goodwill impairment loss would not be proportionate to NCI acquired. ** Amortization of allocated excess Partial-Goodwill Approach: Fair value of Subsidiary Consideration transferred: .................................................................. 300,000 Less: Carrying amount of Martins net assets = Carrying amount of Martin’s shareholders’ equity Common/Ordinary shares – Martin (180,000 x 80%) ............ 144,000 Retained earnings – Martin (60,000 x 80%) ......................... 48,000192,000 Allocated Excess: Acquisition differential – Jan. 1, 20x4 108,000 Less: Over/under valuation of A/L (Allocated to): Increase in Inventory (16,000 x 80%) ........................................ 12,800 Increase in Patents (20,000 x 80%) .......................................... 16,000 28,800 Positive Excess: Goodwill - partial 79,200 Full-Goodwill Approach: Fair value of Subsidiary P300,000/80% .................................................. Consideration transferred: .................................................................. 375,000 Less: Carrying amount of Martins net assets = Carrying amount of Martin’s shareholders’ equity Common/Ordinary shares – Martin (180,000 x 100%) ............ 180,000 Retained earnings – Martin (60,000 x 100%) ......................... 60,000 240,000 Allocated Excess: Acquisition differential – Jan. 1, 20x4 135,000 Less: Over/under valuation of A/L (Allocated to):
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Increase in Inventory (16,000 x 100%) ........................................
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