Вы находитесь на странице: 1из 3

1.

On January 2, 2019, Keith Urban Corporation purchased 70% of the ordinary shares of Mimi Company for
P 4,675,000. At that date, Mimi Company had P 4,887,500 of ordinary shares outstanding and accumulated
profits of P 1,572,500. Mimi’s equipment with a remaining life of 5 years had a book value of P 2,380,000 and a
fair value of P 2,550,000. Mimi’s remaining assets had a book value equal to their fair values. All intangible
assets except goodwill are expected to have remaining lives of 10 years. Non-controlling interest shall be
measured at fair value. The income and dividend figures for both Keith Urban and Mimi Company are as
follows:
Income Dividends
Keith Urban Corporation: 2018 P 1,572,500 P 425,000
2019 1,785,000 510,000
Income Dividends
Mimi Company: 2018 P 340,000 P 55,000
2019 569,500 127,500

Keith Urban’s income shown does not include any dividend income from Mimi. Keith Urban’s accumulated profits
balance at the date of acquisition was P 5,958,500. Assume that Mimi has outstanding 6% P 100 par value
cumulative preference shares with an aggregate value of P 1,000,000 that are classified as equity and are held by
non-controlling interests. What is the income attributable to parent on December 31, 2018 and 2019?

2. On Jan. 1, 2018, PI Co. acquired 75 percent of outstanding shares of SU Co. at book value. For the year 2005, PI
Co. purchased merchandise from SU Co. while S also purchased merchandise from PI Co. Data regarding
intercompany sales, inventories and profit percentages are as follows:
PI Co. SU Co.

Intercompany sales P200,000 P75,000

Intercompany inventories:

January 1, 2018 20,000 10,000

December 31, 2018 15,000 20,000

Gross profit percentages on intercompany

As a percentage of selling price 60% 50%

On July 1, 2018, Su Co. sold equipment to PI Co. at a gain of P20,000. This equipment is estimated to have a
useful life of five years from the date of sale.

Income statements for the two companies exclusive of the recording of Equity in Earnings – Subsidiary for year
2018 are as follows:

PI Co. SU Co.

Sales P 1,500,000 P 400,000

Cost of sales 600,000 200,000

Expenses 300,00 100,000

Gain on sale of equipment . 20,000

P 600,000 P 120,000

The consolidated cost of sales is:


a. P800,000 b. P528,500 c. P521,500 d. P527,000

The income from investment using equity method:


a. P72,375 b. P71,542 c. P72,750 d. P75,750

3. The following balance sheets were prepared for Avril Corp. and Blink Co. on January 1, 2018, just before they
entered into a business combination.

Avril Corp. Blink Co

Cash P 210,000 P 5,000


Accounts Receivable 75,000 20,000

Merchandise Inventory 200,000 50,000

Building and Equipment 400,000 100,000

Accumulated Depreciation (100,000) (25,000)

Goodwill 50,000

Total Assets P 785,000 P 200,000

Accounts Payable P 125,000 P 70,000

Bonds Payable 200,000 30,000

Common Stock

P30 par value 210,000

P20 par value 50,000

Additional paid-in capital 50,000 10,000

Retained Earnings 200,000 40,000

Total Liabilities & Stockholders’ Equity P 785,000 P 200,000

On that date, the fair market value of Blink’s inventories and building and equipment were P78,000 and
P124,000 respectively, while bonds payable has a fair value of P42,000. The fair values of all other asset and
liabilities of Blink (except for goodwill) were equal to their book values. Avril Corp. acquired the net assets of
Blink Co. by issuing 2,500 shares of its P30 par value common stock (current fair value P36 per share) and
purchase price in cash amounting to P12,000. Contingent consideration that is determinable (probable and
reasonably estimated) amounted to P2,000 (discounted value). Additional cash payment made by Avril Corp.
in completing the acquisition were: Legal fee for contract of business combination, P8,000; Accounting and
legal fees for SEC registration, P11,000; Printing costs of stock certificates, P6,000; Finder’s fee, P7,000; Indiret
cost, P5,000.

As a result of the business combination, the amount of total assets in the books of Avril Company.
a. P1,016,000 b. P963,000 c. P967,000 d. P1,1012,000

As a result of the business combination, the amount of retained earnings in the books of Avril Company.
a. P195,000 b.P193,000 c. P200,000 d.P240,000

Вам также может понравиться