1. On December 31, 2015, ABC Co. acquired 80% of XYZ Co.

when the net assets of XYZ is at P 550,000

for 300,000.00 cash, P200,000.00 non-interest bearing note payable for 16 equal monthly payment (the
note has and implied rate of 20%), 1,000 shares of ABC’s P50 par value share with a market value of
P100. The book and fair values of XYZ’s asset and liabilities are equal except for Machinery with a
carrying value of P50,000 has a fair value of P90,000.00 and inventory with overvaluation of P10,000.00.
Financial statement of ABC and YYZ on Dec 31, 2017 are as follows:
ABC Co. (BV) XYZ Co. (BV)
Cash P ? 180,000
A/R-net 1,500,000 200,000
Inventory 100,000 50,000
Other Assets 100,000 20,000
PPE-net 4,000,000 250,000
Land 2,000,000 60,000
Investment in XYZ ?
TOTAL ? 760,000

A/P P 800,000 50,000

Bonds Payable ?
Share Capital 3,000,000 300,000
APIC 2,000,000 130,000
Retained Earnings 4,000,000 280,000
TOTAL P ? 760,000

Net Sales 10,000,000 500,000

Dividends from XYZ 12,000
Net gain from disposal of whouse 40,000
COGS (5,000,000) (150,000)
Operating Expenses (3,000,000) (225,000)
Net Income 2,052,000 125,000
Add: RE, Jan 1, 2017 3,500,000 170,000
Deduct: Dividends (1,552,000) (15,000)
RE, December 31, 2017 4,000,000 280,000

Additional Information:
a. XYZ’s receivable includes P 50,000 due from ABC.
b. Intercompany sales from XYZ to ABC is P80,000 for 2016 (10% unsold by the end of 2016)
and P 100,000 for 2017 (20% unsold by the end of 2017).
c. The machinery of XYZ with a carrying value of P50,000 has remaining life of 4 years from
January 2016 and was assessed to have a fair value of P120,000 on September 30, 2016.
d. 90% of the overvalued inventory of XYZ was sold in 2016.
e. On March 31, 2017, ABC sold a warehouse to XYZ for P150,000. The land has a BV of
P50,000 and the building of the warehouse has a carrying amount of P60,000. XYZ allocate
P100,000 of the sales price to the land and P50,000 to the building. As of March 31, 2017, the
building was estimated to have a remaining life of 4 years.

Requirement: Compute the following amount that would appear in December 31, 2017
consolidated FS:
1. Sales
2. Cost of sale
3. Operating Expenses
4. EHP-Net Income
5. NCI-Net Income
6. Current Assets
7. Total Assets
8. Total Liabilities
9. Non-controlling interest
10. Stockholder’s Equity