a Goodwill 123120x6 P330000 P19300 P 310700 b FV of NCI 123120x6 Non

A goodwill 123120x6 p330000 p19300 p 310700 b fv of

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a. Goodwill, 12/31/20x6 (P330,000 – P19,300) P 310,700 b. FV of NCI, 12/31/20x6: Non-controlling interest (full-goodwill), December 31, 20x6 Common stock – Subsidiary Company, December 31, 20x6 . . . . . . . . . . . . . . . . . . P 400,000 Retained earnings – Subsidiary Company, December 31, 20x6 Retained earnings – Subsidiary Company, January 1, 20x6 (P100,000 + P80,000 – P25,000 – P35,000 – P10,000) .............................. P110,0 00 Add: Net income of Small for 20x6……………………………………………… .. 90,000
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Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P200,0 00 Less: Dividends paid – 20x6……………………………………………… …………. 40,000 160,00 0 Stockholders’ equity – Subsidiary Company, December 31, 20x5 . . . . . . . . . . . . . P 560,000 Adjustments to reflect fair value - (over) undervaluation of assets and liabilities, date of acquisition (January 1, 20x4)- decreased in Net Assets . . . . ( 30,00 0) Less: Amortization of allocated excess (refer to amortization above): 20x4 (P40,000 – P14,000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 26,000 20x5 and 20x6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,00 0) (2,000) Fair value of stockholders’ equity of subsidiary, December 31, 20x6 . . . . . . . . . . . P 532,000 Multiplied by: Non-controlling Interest percentage . . . . . . . . . . . . . . . . . . . . . . . . . 2 0 FV of Non-controlling interest (partial goodwill), 12/31/20x6 . . . . . . . . . . . . . . . . . P 133,000 Add: Non-controlling interest on full goodwill , net of impairment loss [(P330,000 full – P247,000, partial = P82,500…………………………………. P 82,500 Less: Impairment on the NCI (P19,300 x 25%)………………………………… ___4,8 25 ___*77,6 75 FV of Non-controlling interest (full-goodwill), 12/31/20x6. . . . . . . . . . . . . . . . . . . . . P 210,675 *or P330,000 full – P247,000, partial = P82,500 – (impairment loss on full goodwill less (P19,300 x 25%)] = P77,625
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Alternatively, NCI on December 31, 20x6may also be computed as follows (Note: This is the American version of computing NCI, since they only allowed using Full-goodwill Method): Common stock, 12/31/20x6………………………………………………… P 400,000 Retained earnings, 12/31/20x6 (P100,000+P80,000 – P25,000 – P35,000 – P10,000)………….. P 110,000 Add: NI – Subsidiary (20x6) …………………………………………………. 90,000 Dividends – Subsidiary 20x6…………………………………………………. ( 40,000) 160,000 Book value of SHE – S, 12/31/20x6…………………………………………. P560,000 Adjustments to reflect fair value (Increase in Net Assets)………………P 300,000 Amortization of allocated excess: Inventory – 20x4... …………………………………………………….( 40,000) Patent (P14,000 x 3 years) ………………………………………….. 42,000 Impairment of goodwill – 20x6……………………………………..( 19,300) 282,700 FV of SHE of Small………………………………………………………………P 842,700 Multiplied by: NCI% ..................................................................................... 25 % FV of NCI, 12/31/20x6………………………………………………………….. P 210,675 Or, alternatively: Common stock – Subsidiary Company, December 31, 20x6 . . . . . . . . . . . . . . . . . . P 400,000 Retained earnings – Subsidiary Company, December 31, 20x6 Retained earnings – Subsidiary Company,
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January 1, 20x6 (P100,000 + P80,000 – P25,000 – P35,000 – P10,000) .............................. P110,0 00 Add: Net income of Small for 20x6…………………………………………… …..
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