Multiple Choice 12 - N

On January 1, 2008 Polo Corp. issued 200,000 additional shares of P10 par value Ordinary Share
Capital in exchange for all ordinary shares of Solo Corp. Immediately before this business combination,
Polo's shareholders' equity was P6,000,000 and Solo's shareholders’ equity was P2,000,000. On January
1, 2008, fair market value of Polo's ordinary share was P20 per share, and fair market value of Solo's net
assets was P4,000,000. The net income of Polo for the year ended December 31, 2008, exclusive of any
consideration of Solo, was P1,250,000. Solo's net income for the year ended December 31, 2008 was
P300,000. During 2008, Polo paid dividends amounting to P450,000. Polo had no other business
transaction with Solo in 2008. Goodwill impairment loss in 2008 is P100,000.

1. How much is the consolidated shareholders' equity at December 31, 2008?

a. P8,800,000 c. P11,000,000

b. P9,100,000 d. P13,550,000

ANS:C- P11,000,000

Multiple Choice 12 – O

On June 30, 2008, Post, Inc. issued 630,000 shares of its P5 par, P8 market value capital share, for which
it received 50% of Shaw Corp.'s P10 par capital share. The shareholders' equities immediately before the
combination were:

Post Shaw

Ordinary Share Capital P 6,500,000 P2,000,000

Additional Paid-in Capital 4,400,000 1,600,000

Retained Earnings 6,100,000 5,400,000

P17,000,000 P9,000,000

Both corporations continued to operate as separate businesses, maintaining accounting records with
years ending December 31. Assume the use of the full economic entity approach. Impairment loss on
Goodwill for 2008 is P5,100. For 2008, net income and dividends paid from separate company
operations were:
 Post Shaw

Net Income

Six months ended 6/30/08 P1,000,000 P 300,000

Six months ended 12/31/08 1,100,000 500,000

Post Shaw

Dividends paid

April 1, 2008 P1,300,000 --

October 1, 2008 P 350,000

1. In the June 30, 2008 Consolidated Statement of Financial Position, Ordinary Share Capital should be
reported at

a. P9,650,000 c. P8,500,000

b. P9,450,000 d. P8,300,000

ANS: A-P9,650,000

2. In the June 30, 2008 Consolidated Statement of Financial Position, Additional Paid-in Capital should be
reported at

a. P4,400,000 c. P5,840,000

b. P6,290,000 d. P6,000,000

ANS: B-P6,290,000

3. In the June 30, 2008 Consolidated Statement of Financial Position, Retained Earnings should be
reported at

a. P6,100,000 c. P10,960,000

b. P9,660,000 d. P11,500,000

ANS: A-P6,100,000

4. In the 2008 Consolidated Statement of Recognized Income and Expenses, net income should be
reported at

a. P2,550,000 c. P2,100,000

b. P2,336,500 d. P2,334,900

ANS: D- P2,334,900
5. In the December 31, 2008 Consolidated Statement of Financial Position, total minority interest should
be reported at

a. P4,900,000 c. P5,115,000

b. P4,725,000 d. P4,536,000

ANS: C-P5,115,000

Multiple Choice 12 - P

Port Corp. and Sort Co. are sister companies. Port Corp. owns 140,000 shares of Sort Co.'s outstanding
stock of 200,000 shares; on the other hand, Sort Co. owns 120,000 of Port Corp.'s outstanding stock of
600,000 shares. Port Corp. announced a net income of P84,080 for the year 2008 while Sort Co. sustained
a net loss of P12,000 for the same year. The operating results were arrived without considering the
earnings of the affiliate.

1. The net income (loss) of Port Corp. for 2008 on a consolidated basis was:

a. (P45,600) c. P83,600

b. P63,200 d. P88,000

ANS: D- P88,000

Multiple Choice 12 – Q

80% of the outstanding shares of Brix Co. were acquired by Chady Corp. when the equity of Brix Co.
comprised of share of capital of P500,000 and retained earnings of P800,000.

The current statement of financial position of Brix Co. shows share capital of P500,000, a revaluation
reserve of P900,000 and retained Earnings of P2,000,000.

What amount in respect of Brix Co. retained earnings should be included in the consolidated
statement of financial position under IAS 27 Consolidated and separate financial statements?

a. P2,000,000 c. P960,000
b. P1,400,000 d. P500,000
Multiple Choice 12 – R

Duhat Corp. purchased 75% equity interest in Manga Co. when Manga’s equity composed of share capital
of P800,000 and retained earnings of P1,150,000.

Manga’s current statement of Financial Position shows share capital of P800,00 revaluation reserve o
P200,000 and retained earnings of 2,600,000.

What amount in respect to non-controlling interest should be included in Duhat’s consolidated

statement of financial position under IAS 27 Consolidated and separate financial statements?

a. P900,000 c. P2,700,000
b. P2,600,000 d. P3,600,000