Consideration transferred by MM P664000 Noncontrolling interest fair value 166

Consideration transferred by mm p664000

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Consideration transferred by MM ........ P664,000 Noncontrolling interest fair value ............. 166 ,000*
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air value of Subsidiary…………………………………. P830,000 Less: Book value of SHE – S…..……………………. (600,000 ) Positive excess .................................... 230,000 Annual Excess Life Amortizations Excess fair value assigned to buildings 80 ,000 20 years P4,000 Goodwill - full P150 ,000 indefinite -0 - Total ................................................ P4 ,000 2. P150,000 – full goodwill (see No. 1 above) P120,000 – partial-goodwill: Consideration transferred by MM ....... P664,000 Less: Book value of SHE – S (P600,000 x 80%)…….. 480,000 Allocated excess…………………………………….. P184,000 Less: Over/under valuation of A and L: P80,000 x 80% ................................................. 64,000 Goodwill - partial ................................. P120 ,000 3. Full-goodwill Common Stock - TT ...................................... 300,000 Additional Paid-in Capital - TT ..................... 90,000 Retained Earnings - TT ................................. 210,000 Investment in TT Company (80%) .......... 480,000 Non-controlling interest (20%) ................ 120,000 Buildings ...................................................... 80,000 Goodwill ....................................................... 150,000 Investment in TT Company (80%) .......... 184,000 Non-controlling interest (P166,000 – P120,000) 46,000 Partial-goodwill Common Stock - TT ...................................... 300,000 Additional Paid-in Capital - TT ..................... 90,000 Retained Earnings - TT ................................. 210,000
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Investment in TT Company (80%) .......... 480,000 Non-controlling interest (20%) ................ 120,000 Buildings ...................................................... 80,000 Goodwill ....................................................... 120,000 Investment in TT Company (80%) .......... 184,000 Non-controlling interest (20% x P80,000) 16,000 4. Cost Model/Initial Value Method Dividends received (80%) ................................. P 8 ,000 Investment in Taylor—12/31/x4 (original value paid)………… P664,000 Equity Method Income accrual (80%) ....................................... P56,000 Excess amortization expense ............................. (3 ,200 ) Investment income ....................................... P52 ,800 Initial fair value paid .................................................... P664,000 Income accrual 20x4–20x6 (P260,000 × 80%) . 208,000 Dividends 20x4–20x6 (P45,000 × 80%) ........... (36,000) Excess Amortizations 20x4–20x6 (P3,200 × 3) (9 ,600 ) Investment in TT—12/31/x6 ......................... P826 ,400 5. Same answer with No. 4. 6. Using the acquisition method, the allocation will be the total difference (P80,000) between the buildings' book value and fair value. Based on a 20 year life, annual excess amortization is P4,000. MM book value—buildings ......................... P 800,000 TT book value—buildings ............................ 300,000 Allocation ..................................................... 80,000 Excess Amortizations for 20x4–20x5 (P4,000 × 2) …………. (8,000 ) Consolidated buildings account ………………… P1,172,000 7. Acquisition-date fair value allocated to goodwill: Goodwill-full ( see No. 1 above) ....................... P 150 ,000
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Goodwill-partial (see No. 1 above)……………………………… P 120,000 8. The common stock and additional paid-in capital figures to be reported are the parent balances only. Common stock, P500,000 Additional paid-in capital, P280,000 Problem VI 1. Common stock of TT Company on December 31, 20x4 P 90,000 Retained earnings of TT Company January 1, 20x4 P 130,000 Sales for 20x4 195,000 Less: Expenses (160,000) Dividends paid (15,000 ) Retained earnings of TT Company on December 31, 20x4 150,000 Net book value on December 31, 20x4 P240,000 Proportion of stock acquired by QQ x .80 Purchase price P192,000 2. Net book value on December 31, 20x4 P240,000 Proportion of stock held by noncontrolling interest x .20 Balance assigned to noncontrolling interest P 48,000 3. Consolidated net income is P143,000. None of the 20x4 net income of TT Company was earned after the date of purchase and, therefore, none can be included in consolidated net income.
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