12000 Buildings 216000 Non controlling interest P90000 x 20 18000 Investment in

12000 buildings 216000 non controlling interest

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12,000 Buildings……………………………………….. 216,000 Non-controlling interest (P90,000 x 20%) ……………………….. 18,000
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Investment in S Co………………………………………………. 84,000 To allocate excess of cost over book value of identifiable assets acquired, with remainder to goodwill; and to establish non- controlling interest (in net assets of subsidiary) on date of acquisition. (E3) Cost of Goods Sold……………. 6,000 Depreciation expense……………………….. 6,000 Accumulated depreciation – buildings………………….. 6,000 Interest expense………………………………… 1,200 Goodwill impairment loss………………………………………. 3,000 Inventory…………………………………………………… …….. 6,000 Accumulated depreciation – equipment……………….. 12,000 Discount on bonds payable………………………… 1,200 Goodwill…………………………………… 3,000 To provide for 20x4 impairment loss and depreciation and amortization on differences between acquisition date fair value and book value of Son’s identifiable assets and liabilities as follows: Cost of Goods Sold Depreciation / Amortization Expense Amortizatio n -Interest Total Inventory sold P 6,000 Equipment P 12,000 Buildings ( 6,000) Bonds payable ______ _ _______ P 1,200 Totals P 6,000 P 6,000 P1,200 13,20 0 (E4) Dividend income - P………. 28,800 Non-controlling interest (P36,000 x 20%)……………….. 7,200 Dividends paid – S…………………… 36,000 To eliminate intercompany dividends and non-controlling interest share of dividends. (E5) Gain on sale of equipment 15,000 Equipment 30,000 Accumulated depreciation 45,000 To eliminate the downstream intercompany gain and restore to its original cost to the consolidate entity (along with its accumulated depreciation at the point of the intercompany sale). (E6) Gain on sale of equipment 31,200 Equipment 12,000 Accumulated depreciation 43,200 To eliminate the upstream intercompany gain and restore to its original cost to the consolidate entity (along with its accumulated depreciation at the point of the intercompany sale). (E7) Accumulated depreciation……….. 2,250 Depreciation expense…………… 2,250 To adjust downstream depreciation expense on equipment sold to
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subsidiary, thus realizing a portion of the gain through depreciation (P15,000 / 5 years x 9/12 = P2,250). (E8) Accumulated depreciation……….. 3,900 Depreciation expense…………… 3,900 To adjust upstream depreciation expense on equipment sold to parent, thus realizing a portion of the gain through depreciation (P31,200/85 years x 1 year = P3,900). (E9) Non-controlling interest in Net Income of Subsidiary………… 10,140 Non-controlling interest ………….. 10,140 To establish non-controlling interest in subsidiary’s adjusted net income for 20x4 as follows: Net income of subsidiary…………………….. P 91,200 Unrealized gain on sale of equipment (upstream sales) ( 31,200) Realized gain on sale of equipment (upstream sales) through depreciation 3,900 S Company’s realized net income from separate operations P 63,900 Less: Amortization of allocated excess [(E3)]…. 13,200 P 50,700 Multiplied by: Non-controlling interest % .......... 20% Non-controlling
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