* naka cost method tay sa buong Tik and Tok company

CONSO FS AT ACQUISITION DATE (SFP), kap

There is control kaya di siya presented sa co

If investment in associate lang, it is presente
Pati financial asset thru comprehensive inco

Single economic entity yung SHE, so yung pa

SHE of subsidiary is not viewed as single eco

SAMPLE PROBLEM FOR ONE YAER AFTER ACQUISITION DATE

the following are the trial balance of tik and tok company as of December 31, 2020, after the
first year of business combination:
Tik Tok
Cash 3,605 2,786
Accounts receivable 820 656
Inventory 315 252
Land 1,500 2,700
Equipment 500 400
Accum Deprn- equipment 100 80
Building 2,250 1,800
Accum Deprn- building 600 480
Investment in subsidiary 5,760
Investment property 3,000
Patent 320 256
Accounts payable 130 58
Bonds payable 4,990 3,992
Share capital, Php2 per share 2,000 1,600
Share premium 500 400
Retained earnings 5,750 4,600
Sales 3,000 2,490
Cost of sales 1,200 960
Operating expenses 600 480
Non-operating expenses 20 10
Dividend income 320
Dividends paid 500 400
- -

Additional information:
(a) during the year, goodwill is impaired by P10.
(b) Tok company purchased land from Snapchat corporation during the year for P1,500.
Tok company purchased land for P3,000 and classified it as an investment property.
( c) The property has no available fair value, hence, the cost model is used.

Required
1 prepare the necessary journal entries in the books of the parent
2 prepare the working paper eliminating journal entries
3 prepare the consolidated financial statement

ELIMINATING ETRIES (December 31, 2020)

AT ACQUISITION DATE we prepared the eliminating entries again, o
Share capital, Php2 per share 1,600
Share premium 400
Retained earnings 4,600
Land 100
Accum Deprn- equipment 40
Accum Deprn- building 240
Patent 15
Goodwill 1,103
Inventory 4
Equipment 58
Building 786
Premium on bonds payable 50
Investment in subsidiary 5,760
Non-controlling interest 1,440

SUBSEQUENT TO ACQUISITION DATE

Establishment of Beginning Balances of the Consolidated Balances of the ff:
*not applicable if the reporting date Is only 1 year after the acquisition date
because as od Dec 31 2020, the beg balances of the account are also the
acquisition date balances which we already established when we
prepared the acquisition date eliminating entries.
*applicable pag 2 years or more na
*skipped kasi yung beginning RE same lang sa RE ni parent
Elimination of Intercompany Transactions
* dividend income is a possible intercompany transaction
Tik companyTok company issued a P400 diveidend, since
Tik company has a CI of 80% then (400x0.8=320) which is
the dividend income seen on the trial balance given.

Dividend income 320

Non-controlling interest 80
Dividends paid 400
this is eliminated because all income that appears on the conso fs are
income generated from outside transactions, not earned within the entity
eliminate dividends paid by ALL subsidiaries, kasi dapat dividends paid
lang ni parent ang nasa conso fs

Amortization of excess over book value

Inventory 4
Cost of sales 4
reduce the 960 COS in the subsidiary so it is not overstated

Accum Deprn- equipment 2

Operating expense (dep ex) 2

Accum Deprn- building 42

Operating expense (dep ex) 42

Operating expense 3
Patent 3

Premium on bonds payable 10

Non-operating expense (Interest expense) 10 non-dep asset

Non-operating expense (impairment loss) 10

Goodwill 10

Recognition of NCI's share in subsidiary net income for consolidation purposes

Share on NCI in Subsidiary's Net Income 217
Non-controlling interest 217
** CORRECTION: the last column of the consolidated statement of changes in shareholders' equity should be corrected. Dap

*Goodwill do not appear on the separate fs of acquirer and acquiree for stock acquisition, but it appears on the separate fs
 AT ACQUISITION DATE (SFP), kapag Income Statement, IS lang ng parent yung conso fs, di kasali yung sa subs

ontrol kaya di siya presented sa conso FS.

ent in associate lang, it is presented in conso fs kasi walang control.
ial asset thru comprehensive income mag-aapear din sa conso fs as long as walang control

nomic entity yung SHE, so yung parent lang ng Parent company and mag-aappear.
sidiary is not viewed as single economic entity and has no control, so it should not appear in the conso fs.
ed the eliminating entries again, one year after the acquisition date

internal transactions m

(ex: if you are deprecia

 (ex: inventory)
any remaining fair value changes t

amortized upon impairment, not a

we'll use FIFO, then assume that a

no amort kasi no info regarding sa
depreciate based on fv. (342/9=38
42 or
- 3 or

net effect is increase in net income

Share on NCI in Subsidiary's Net Income Subs NI per books Debit Credit Subs NI in Conso FS
Sale 2,490 2,490
Cost of sales - 960 4 - 956
Gross Profit 1,530 1,534
Operating expenses - 480 3 44 - 439
Non-operating expenses - 10 10 10 - 10
Net Income 1,040 13 58 1,085
Percentage of NCI 0.20
Share of NCI in the Subsidiary's NI (for conso purp) 217
s' equity should be corrected. Dapat puro totals ang nandun ha.

but it appears on the separate fs of acquirer for asset acquisition

internal transactions must be eliminated because only transactions with outside parties must be presented in the conso fs (single entity t

(ex: if you are depreciating PPE, you do not depreciate based on the historical cost used by the subsidiary, the parent company should de
menaing, the carrying amount of PPE and dep ex in the books of subsidiary is dofferent from what appears on the conso fs
ning fair value changes that is not yet amortized, shall be amortized in FULL at the date of sale

upon impairment, not annually

IFO, then assume that all are sold

kasi no info regarding sale
e based on fv. (342/9=38, 360/9=40. may 2 difference)
42 pag straight line lang yung ganto
- 3
10

is increase in net income by 45

Subs NI in Conso FS

Subsidiary's Cost of Sales for conso purposes

Subsidiary's opex for conso purposes

Subsidiary's nopex for conso purposes, not the whole conso FS amount kasi kay subs lang
e conso fs (single entity theory)

rent company should deprecite using the fair value presented in the conso fs)
pears on the conso fs
THIS PROCEDURE WILL ALSO APPLY TO THE SUBSEQUENT YEARS AFTER YEAR 2

the following are the trial balance of tik and tok company as of December 31, 2021, after the
first year of business combination: Parent Subs
Tik Tok
Cash 5,330 2,996
Accounts receivable 780 800
Inventory 332 266
Land 1,500 2,700
Equipment 500 200
Accum Deprn- equipment 150 60
Building 2,250 1,800
Accum Deprn- building 900 720
Investment in subsidiary 5,760
Investment property 3,000
Patent 240 192
Accounts payable 105 80
Bonds payable 4,980 3,984
Share capital, Php2 per share 2,000 1,600
Share premium 500 400
Retained earnings 6,750 5,240
Sales 3,600 1,385
Cost of sales 1,440 700
Operating expenses 720 570
Non-operating expenses 25 20
Gain on sale of equipment 15
Dividend income 192
Dividends paid 300 240
- -

Additional information:
(a) during the year, goodwill is impaired by P25.
(b) on December 31, 2021, Tok Company sold half of its equipment with a carrying
amount of P140.

Required
1 prepare the necessary journal entries in the books of the parent
2 prepare the working paper eliminating journal entries
3 prepare the consolidated financial statement

ELIMINATING ETRIES (December 31, 2021)

AT ACQUISITION DATE uulitin lang
Share capital, Php2 per share 1,600
Share premium 400
Retained earnings 4,600
Land 100
Accum Deprn- equipment 40
Accum Deprn- building 240
Patent 15
Goodwill 1,103
Inventory 4
Equipment 58
Building 786
Premium on bonds payable 50
Investment in subsidiary 5,760
Non-controlling interest 1,440

SUBSEQUENT TO ACQUISITION DATE

Adjustment to beginning balances of conso RE, conso OCI, & NCI why do we need to establish
because they do not represe
*distribute mo yung increase sa RE (5240-4600) sa NCI at CI. Yung portion kasi may adjustments ka last
ni NCI icoclose sa NCI account and the portion of CI wil be recorded in the ng both entities
conse RE or conso OCI we need to reflect the net eff

Retained earnings (subsidiary) 640 how to establish beginning b

Retained earnings (parent) 512
Non-controlling interest 128

*the amortization we didi on 2020 must be reflected in the beg bal of RE

and OCI. The net adj. made has a net effect of P45 increase on the net income of the subs
so yung beg bal ng RE must include the 80% of the P45 increase and the NCI
must include the 20%.

Prior Period Amortization of excess over book value

Inventory 4
Accum Deprn- equipment 2
Accum Deprn- building 42
Premium on bonds payable 10
Patent 3
Goodwill 10
Retained earnings 36
Non-controlling interest 9
*the nominal accounts are replaced with RE and NCI account
conso RE will increase by 36, NCI will increas by 9

Conso RE NCI
Parent's RE per TB 6,750
Eliminating entries:
 Acquisition date balance 1,440
Share in the increase n Subs' RE 512 128
Share in the amortization of excess 36 9
Consolidated balances, January 1, 2021 7,298 1,577 pag chineck mo to sa Dec 31, 2020 conso statemen

so naestablish na natin yung beginning balances ng RE at NCI, wala namang OCI sa problem na to eh

Elimination of Intercompany Transactions

* yung dividends lang ulit
Dividend income 192 -80%
Non-controlling interest 48 -20%
Dividends paid 240

2021 Amortization of excess over book value

Accum Deprn- equipment 2
Operating expense (dep ex) 2

Accum Deprn- building 42

Operating expense (dep ex) 42

Operating expense 3
Patent 3

Premium on bonds payable 10

Non-operating expense (Interest expense) 10

Non-operating expense (impairment loss) 25

Goodwill 25
*pwede mo rin icompound entry

Accum deprn- equip 7 Cash Proceeds

Gain on sale of equipment 7 Carrying Amount
* yung gain on sale mo sa fs magiging 22=(15+7) na. naiba yan kasi yung 15 nakabase Gain on Sale
sa carrying amount na 140 (200-60), ehh dapat sa depreciated acquisition date fair value

Recognition of NCI's share in subsidiary net income for consolidation purposes Share of NCI in Subsidiary's N
Share on NCI in Subsidiary's Net Income 28.6 Sale
Non-controlling interest 28.6 Cost of Sales
Gross profit
Gain on sale of equipment
Operating expenses
Non-operating expenses
Net income
* all the eliminating entries related to the acquisition date are all real accounts Percentage of NCI
so only the balance sheet ang afected ag nagpost sa workiing paper Share of NCI in Subsidiary's N

*sa current year eliminating entries, may nominal at real, so both SFP and SI and affected
why do we need to establish the beg balances?
because they do not represent the consolidated balances if we just get the summation
kasi may adjustments ka last year na eliminating entries na di naman nagreflect sa books
ng both entities
we need to reflect the net effect of all the eliminating entires we did on the prior years

how to establish beginning balances

Conso RE and OCI should only be the amounts attributable to the contro
it means that we include the RE and OCI of parent in its FS and its share
income or loss of the subsidiary

Subs' RE and OCI are eliminated at acqui date diba, however, after the a
why? Because the compre income closed to RE and OCI of subs in the ye
1. NONCONTROLLING INTEREST
2. CONTROLLING INTEREST (CONSO RE AND OCI)

1. NONCONTROLLING INTEREST= Income(loss)+(dividends) x % NCI

2. CONTROLLING INTEREST (CONSO RE AND OCI)= Income (loss) x % CI

only NCI will be reduced for the dividends it received from the subsidia
the subs id not part of the amount to be reflected in the conso RE, beca
any dividends paid by the subsidiary will not be reflected on the conso
a Dec 31, 2020 conso statement of cse, same

wala na yung sa inventory kasi fully amortized na y

nung nagbenta ka ng equip, may natira pang unam

25 dapat to, di 21 ha
ito 26 dapat

Separate FConso FS
Cash Proceeds 155 155
Carrying Amount 140 133 133 alternative computation (342 fv on acqui date time 7/9 kasi 7 years remaining usef
Gain on Sale 15 22 ayan 22 nga yung gain on sale

Share of NCI in Subsidiary's Net Income Subs. NI per books Dr Cr Subs NI in Conso FS
1,385 1,385
Cost of Sales - 700 - 700
Gross profit 685 685
Gain on sale of equipment 15 7 22
Operating expenses - 570 41 - 529
Non-operating expenses - 20 15 - 35
Net income 110 15 48 143
Percentage of NCI 0.2
Share of NCI in Subsidiary's Net Income (for conso pur 28.60
unts attributable to the controlling interest
f parent in its FS and its share in the

ate diba, however, after the acquisition date, changes in RE and OCI are no longer eliminated
to RE and OCI of subs in the years after the acqui date should be separated into two:

loss)+(dividends) x % NCI subsequent to acquisition date to ah, look mo sa ppt ss sa kanan

ND OCI)= Income (loss) x % CI

s it received from the subsidiary, but for the conso RE, the share of the CI on the dividends declared by
eflected in the conso RE, because the conso RE should only be reduced by the dividends paid by the CI.
not be reflected on the conso RE.
ntory kasi fully amortized na yun P4.

g equip, may natira pang unamortized (18-2-2) 14, half lang nabenta so 14/2. yung 7 iaamortize mo na ng buo

/9 kasi 7 years remaining useful life over useful life, divided by 2 kasi half lang binenta)
PROBLEM 11: COMPUTATION OF CONSOLIDATED BALANCES

ACQUISITION ANALYSIS 80% 20%

CI NCI Total
fv of subs 2,400,000 600,000 3,000,000
control premium 100,000 100,000
consideration transferred 2,500,000 600,000 3,100,000
bv of net assets acquired - 1,032,000 - 258,000 - 1,290,000
excess over book value 1,468,000 342,000 1,810,000
over and under valuation
fv bv
building 1,000,000 1,250,000 250,000
trademarks 900,000 700,000 - 200,000
patented technology 2,000,000 940,000 - 1,060,000
unpatented technologie 600,000 - 600,000
Net under valuation of net assets - 1,288,000 - 322,000 - 1,610,000
goodwill (BPG) 180,000 20,000 200,000

FULL GOODWILL APPROACH

Parent Subs Elim Entries
Revenues 3,000,000 1,400,000
Expenses - 1,750,000 - 600,000 - 475,000
Net income from operation per books 1,250,000 800,000
Dividend income 24,000 - 24,000
Net income per books 1,274,000 800,000
Adjustments
Elimination of intercompany trans - 24,000
Amortization of excess over book value - 475,000
Net income for consolidation purposes 1,250,000 325,000
Consolidated Net Income attrib to NCI - 65,000
Consolidated Net Income attrib to CI 1,250,000 260,000

Partial GOODWILL APPROACH

Parent Subs
Revenues 3,000,000 1,400,000
Expenses - 1,750,000 - 600,000
Net income from operation per books 1,250,000 800,000
Dividend income 24,000
Net income per books 1,274,000 800,000
Adjustments
Elimination of intercompany trans - 24,000
Amortization of excess over book value - 435,000
Net income for consolidation purposes before i 1,250,000 365,000
Goodwill impairment - 32,000
Consolidated net income 1,250,000 333,000
Consolidated Net Income attrib to NCI - 73,000
Consolidated Net Income attrib to CI 1,250,000 260,000

NCI (full goodwilpartial goodwil

January 1, 20x4 600,000 580,000 or
Dividend - 6,000 - 6,000
Net income 65,000 73,000 di mo isasama goodwill sa conso
December 31, 20x4 659,000 647,000 pero kasama siya sa computation

NCI full goodwil basis is fv of subs

NCI paartial goodwill basis is fv of net assets

SILENT- COST METHOD

Cost Equity
Dividends received from subs Dividend incomeDeduction from investment in subsidiary
Share of parent in subs compre income No entry Addition to invt in subs
Share of parent in subs compre loss No entry Deduction from investment in subsidiary

PARENT'S BOOKS
Investment in subsidiary 2,500,000
Cash 2,500,000

ELIMINATING ENTRIES at ACQUISITION DATE

Common stock 50,000
Additional paid-in capital 500,000
Retained earnings 740,000
Trademarks 200,000
Patented technology 1,060,000
Unpatented technology 600,000
Goodwill 200,000
Building 250,000
Noncontrolling interest 600,000
Invenstment in subsidiary 2,500,000

CURRENT YEAR ELIMINATING ENRTIES

Elimination of intercompany transactions
Dividend income 24,000
Noncontrolling interets 6,000
Dividend paid 30,000
 Amortization of excess over book value
Accum dep 50,000
Dep ex 50,000

Amortization expense - TM 20,000

Accum amort - TM 20,000

Amortization expense - PT 265,000

Accum amort - PT 265,000

Amortization expense - UPT 200,000

Accum amort - UPT 200,000

Impairment loss 40,000

Goodwill 40,000
*nilagyan lang ni sir ng impairment yung goodwill for discussion purposes
Goodwi impairment is 40,000

** PARTIAL GOODWILL APROACH

Impairment loss 32,000
Goodwill 32,000

Recognition of NCI's share in subsidiary net income for consolidation purposes

Share on NCI in Subsidiary's Net Income 65,000
Non-controlling interest 65,000

SAGOT SA BOOK page 323

1 2,500,000
2
3
4 200,000
5 1,575,000 conso net inc
- 65,000 NCI
1,510,000 conso RE
6 659,000
7

NO.7 computation
1 0
Consideration transferred 2,500,000 450,000 2,950,000
FV of net assets 2,320,000 580,000 2,900,000
Goodwill (BPG) 180,000 - 130,000 50,000
BPG is not applicable to NCI
pag naka BPG, parang naka partial goodwill app
 Amortization
50,000
20,000
265,000
200,000

Conso ELIMINATING ENTRIES THAT AFFECT NET INCOME

4,400,000 1. Elimination of intercompany transactions
- 2,825,000 2. Amortization of excess over book value
1,575,000

1,575,000

1,575,000 conso net inc

- 65,000
1,510,000 conso RE
 1,583,000 conso net inc is higher kasi wala ka nang share sa impairment ng goodwill
- 73,000
1,510,000 conso RE

580,000

o isasama goodwill sa conso income attributable to NCI kasi di na siya makikihati sa imp loss ng goodwill kasi kay parent yun lahat
o kasama siya sa computation ng net income for conso purposes

vestment in subsidiary

vestment in subsidiary
ang naka partial goodwill approach
*sold to outside parties. Pag sa subsidiary mo
used; sold to outside parties
discount or premium ng bonds
impairment
kasi kay parent yun lahat
es. Pag sa subsidiary mo binenta, di ka magaamortize ng excess
 70% 30%
CI NCI Total
consi trans/fv of nci 540,000 210,000 750,000

490,000 210,000 700,000

control premium 50,000 50,000
consi trans/fv of nci 540,000 210,000 750,000
book value of net aseets 424,200 181,800 606,000
excess over bv of net assets 115,800 28,200 144,000
Over(under) valuation fv bv
inventory 17,000 12,000 - 3,500 - 1,500 - 5,000
buikding 315,000 262,500 - 36,750 - 15,750 - 52,500
equipment 144,000 180,000 25,200 10,800 36,000
land 250,000 200,000 - 35,000 - 15,000 - 50,000
bonds paya- 109,400 - 99,000 7,280 3,120 10,400
Net over(under) - 42,770 - 18,330 - 61,100
Goodwill 73,030 9,870 82,900
PARENT'S BOOKS
Investment in subsidiary 540,000
Cash 540,000

ELIMINATING ENTRIES AT ACQUISITION DATE

elimination of the subsidiary's she
common stock 200,000
share premium 300,000
retained earnings 95,000
other comprehensive income 15,000
treasury shares 4,000
investment in subsidiary 424,200
non-controlling interest 181,800

adjustments of subsidiary's net assets to fair value

inventory 5,000
accum dep-building 87,500
land 50,000
accum dep- equipment 45,000
building 35,000
equipment 81,000
discount on bonds payable 10,400
investment in subsidiary 42,770
non-controlling interest 18,330

recognition of goodwill
goodwill 82,900
investment in subsidiary 73,030
non-controlling interest 9,870

EQUITY METHOD NA SI PARENT KASI SUBSEQUENT TO ACQUISITION DATE NA

PERO GAWIN DAW MUNA NATIN YUNG COST METHOD PARA MAKITA DIFFERENCE

ACQUIRER'S BOOKS (COST METHOD)

acquisition cost 540,000 SAME

investment in subsidiary 540,000 DITO
cash LANG

dividend income from the subsidiary

Cash 21,000
dividend income 21,000
share of parent in the subsidiary's comprehensive income(loss)
NO ENTRY under cost method

books amortization CONSO FS PARENT NCI

Sales 328,000 328,000
cost of sales - 237,500 - 5,000 - 242,500
gross profit 90,500 - 5,000 85,500
expenses - 90,000 - 3,700 - 93,700
net income(loss) 500 - 8,700 - 8,200 - 5,740 - 2,460
unrealized gain(loss)-OCI 2,500 2,500 1,750 750
comprehensive income(loss) 3,000 - 8,700 - 5,700 - 3,990 - 1,710
 2020 naaaaa
ACQUIRER'S BOOKS (COST METHOD)
dividend income from the subsidiary
Cash 21,000
dividend income 21,000

share of parent in the subsidiary's comprehensive income(loss)

NO ENTRY under cost method

books amortization CONSO FS PARENT NCI

Sales 446,050 446,050
cost of sales - 198,000 - 198,000
gross profit 248,050 - 248,050
expenses - 129,600 - 9,700 - 139,300
net income(loss) 118,450 - 9,700 108,750 76,125 32,625
unrealized gain(loss)-OCI 3,500 3,500 2,450 1,050
comprehensive income(loss) 121,950 - 9,700 112,250 78,575 33,675
e1

e2
e3
ACQUIRER'S BOOKS (EQUITY METHOD)

acquisition cost 540,000

investment in subsidiary 540,000
cash

dividend income from the subsidiary

Cash 21,000
investment in subsidiary 21,000
share of parent in the subsidiary's comprehensive income(loss)
investment income(loss)-P&L 5,740
investment income-oci 1,750
investment in subsidiary 3,990

amortization of excess over book 2019 2020

inventory - 5,000 - 5,000 assume all is sold if silent, tapos siso method
building - 52,500 - 3,500 - 3,500
equipment 36,000 4,500 4,500
land - 50,000 di iaamortize unless ibebenta na kasi wala namang effect
bonds payable 10,400 1,300 1,300
- 61,100 - 2,700 2,300
goodwill impairment 82,900 - 6,000 - 12,000
effect on net income 21,800 - 8,700 - 9,700

ELIMINATING ENTRIES AT DEC 31, 2019 (uulitin lang yung sa acqui date) ADITIONAL ELIMINATING ENTRIES
elimination of the subsidiary's she elimination of intercompany trans
common stock 200,000 investment income-oci
share premium 300,000 investment in subsidiary
retained earnings 95,000 investment income(los
other comprehensive income 15,000
treasury shares 4,000 investment in subsidiary
investment in subsidiary 424,200 non-controlling interest
non-controlling interest 181,800 dividends paid

adjustments of subsidiary's net assets to fair value amortization of excess over book
inventory 5,000 cost of sales
accum dep-building 87,500 inventory
land 50,000
accum dep- equipment 45,000 expenses
building 35,000 accum dep-building
equipment 81,000
discount on bonds payable 10,400 accum dep- equipment
investment in subsidiary 42,770 expenses
non-controlling interest 18,330
discount on bonds payable
recognition of goodwill expenses
goodwill 82,900
investment in subsidiary 73,030 expenses
non-controlling interest 9,870 goodwill

share of NCI in subsidiary's compr

NCI in subsidiary's OCI
non-controlling interest
 NCI in subsidiary's net i

ACQUIRER'S BOOKS (EQUITY METHOD)

dividend income from the subsidiary
Cash 21,000
investment in subsidiary 21,000

share of parent in the subsidiary's comprehensive income(loss)

investment income-oci 78,575
investment in subsidiary 2,450
investment income(loss)-P&L 76,125

ELIMINATING ENTRIES AT DEC 31, 2020 (uulitin lang yung sa acqui date) ADITIONAL ELIMINATING ENTRIES
elimination of the subsidiary's she changes in subsidiary's RE & OCI
common stock 200,000
share premium 300,000 Jan 1, 2020
retained earnings 95,000 acquisition date
other comprehensive income 15,000 increase(decrese)
treasury shares 4,000
investment in subsidiary 424,200 investment in subsidiary
non-controlling interest 181,800 non-controlling interest
retained earnings
adjustments of subsidiary's net assets to fair value
inventory 5,000 other comprehensive income
accum dep-building 87,500 investment in subsidiar
land 50,000 non-controlling interes
accum dep- equipment 45,000
building 35,000 prior year amortization of excess
equipment 81,000 accum deo-equipment
discount on bonds payable 10,400 discount on bonds payable
investment in subsidiary 42,770 investment in subsidiary
non-controlling interest 18,330 non-controlling interest
inventory
recognition of goodwill accum dep-building
goodwill 82,900 goodwill
investment in subsidiary 73,030
non-controlling interest 9,870 CURRENT YEAR-2020 eliminating
elimination of intercompany trans
investment income-oci
investment in subsidiary
investment income(los

investment in subsidiary
non-controlling interest
dividends paid

amortization of excess over book

accum dep-equipment
discount on bonds payable
expenses
accum dep-building
goodwill

share of NCI in subsidiary's compr

NCI in subsidiary's net income(loss
NCI in subsidiary's OCI
non-controlling interes
iso method

kasi wala namang effect sa comprehensive income

L ELIMINATING ENTRIES Dec 31, 2019

n of intercompany transactions
t income-oci 1,750 walang ganto sa cost method
t in subsidiary 3,990
investment income(loss)-P&L 5,740

t in subsidiary 21,000 imbes na dividend income ang debit,

olling interest 9,000 investment in subs ang gamit
dividends paid 30,000

on of excess over book value

5,000
5,000

3,500
accum dep-building 3,500

p- equipment 4,500
4,500

n bonds payable 1,300

1,300

6,000
6,000

CI in subsidiary's comprehensive income

sidiary's OCI 750
olling interest 1,710
 NCI in subsidiary's net income(loss) 2,460

L ELIMINATING ENTRIES Dec 31, 2020

n subsidiary's RE & OCI
RE OCI
65,500 17,500
95,000 15,000
- 29,500 2,500

t in subsidiary 20,650 sa cost method RE ni parent

olling interest 8,850
retained earnings 29,500

prehensive income 2,500

investment in subsidiary 1,750 sa cost method OCI ni parent
non-controlling interest 750

amortization of excess (pag nominal accounts, di lang basta copy paste)

o-equipment 4,500
n bonds payable 1,300
t in subsidiary 6,090 sa cost method RE ni parent
olling interest 2,610
5,000
accum dep-building 3,500
6,000

YEAR-2020 eliminating entries

n of intercompany transaction
t income-oci 22,450
t in subsidiary 76,125
investment income(loss)-P&L 78,575

t in subsidiary 21,000
olling interest 9,000
dividends paid 30,000

on of excess over book value 2020

p-equipment 4,500
n bonds payable 1,300
9,700
accum dep-building 3,500
12,000

CI in subsidiary's comprehensive income

sidiary's net income(loss) 32,625
sidiary's OCI 1,050
non-controlling interest 33,675
PROBLEM 1 CHAPTER 3 p.315

12/31/20x4 12/31/20x4 12/31/20x5 12/31/20x5

pascual sax pascual sax
cash 232,800.00 90,000.00 265,200.00 102,000.00
accounts receivable 90,000.00 60,000.00 180,000.00 96,000.00
inventory 120,000.00 90,000.00 216,000.00 108,000.00
land 210,000.00 48,000.00 210,000.00 48,000.00
equipment 240,000.00 180,000.00 240,000.00 180,000.00
buildings 720,000.00 540,000.00 720,000.00 540,000.00
investment in sax company 372,000.00 372,000.00
cost of goods sold 204,000.00 138,000.00 216,000.00 192,000.00
discount on bonds payable
depreciation expense 60,000.00 24,000.00 60,000.00 24,000.00
interest expense
other expenses 48,000.00 18,000.00 72,000.00 54,000.00
goodwill impairment loss
dividends paid 72,000.00 36,000.00 72,000.00 48,000.00
2,368,800.00 1,224,000.00 2,623,200.00 1,392,000.00

accum dep-equipment 135,000.00 96,000.00 150,000.00 102,000.00

accum dep- buildings 405,000.00 288,000.00 450,000.00 306,000.00
accounts payable 120,000.00 120,000.00 120,000.00 120,000.00
bonds payable 240,000.00 120,000.00 240,000.00 120,000.00
common stock 600,000.00 240,000.00 600,000.00 240,000.00
retained earnings 360,000.00 120,000.00 484,800.00 144,000.00
sales 480,000.00 240,000.00 540,000.00 360,000.00
dividend income 28,800.00 38,400.00
2,368,800.00 1,224,000.00 2,623,200.00 1,392,000.00

0.80 0.20
ACQUISITION ANALYSIS CI NCI Total
consideration transferred/fv of nci 372,000.00 93,000.00 465,000.00
bv of net assets acquired, 01/01/20x4 288,000.00 72,000.00 360,000.00
excess over bv 84,000.00 21,000.00 105,000.00
over(under) valuation of net assets,01/01/x4
FV BV
inventory 30,000.00 24,000.00 - 6,000.00
land 55,200.00 48,000.00 - 7,200.00
equment, net 180,000.00 84,000.00 - 96,000.00
building, net 144,000.00 168,000.00 24,000.00
bonds payable 115,200.00 120,000.00 - 4,800.00
net under valuation - 72,000.00 - 18,000.00 - 90,000.00
goodwill 12,000.00 3,000.00 15,000.00
 Parent Subs Conso 20x4
Sales 480,000.00 240,000.00 720,000.00
COGS - 204,000.00 - 138,000.00 - 6,000.00 - 348,000.00
Gross profit 276,000.00 102,000.00 372,000.00
Dividend income 28,800.00 - - 28,800.00 -
Dep ex - 60,000.00 - 24,000.00 - 6,000.00 - 90,000.00
Int ex - - - 1,200.00 - 1,200.00
Other ex - 48,000.00 - 18,000.00 - 66,000.00
Goodwill impairmaint - - - 3,750.00 - 3,750.00
Net income per books 196,800.00 60,000.00 211,050.00
Elimination of inter co trans
Div inc - 28,800.00
Amort of excess Partial GW
net under - 13,200.00
Net income for conso before GW im 168,000.00 46,800.00 46,800.00 211,050.00
goodwill imp - 3,750.00 - 3,000.00
Conso net income-closed to SHE 168,000.00 43,050.00 43,800.00
share of NCI-closed to NCI - 8,610.00 - 9,360.00 - 8,610.00
share of CI-closed to conso RE 168,000.00 34,440.00 34,440.00 202,440.00

CONSOLIDATED SHAREHOLDERS' EQUITY

FULL GOODWILL
01/01/20x4 20x4 conso NI Dividend paid 12/31/20x4
Common stock 600,000.00 600,000.00
Retained earnings 360,000.00 202,440.00 - 72,000.00 490,440.00
Noncontrolling interest 93,000.00 8,610.00 - 7,200.00 94,410.00
Conso SHE 1,053,000.00 211,050.00 1,184,850.00

Partial GW
01/01/20x4 20x4 conso NI Dividend paid 12/31/20x4
Common stock 600,000.00 - - 600,000.00
Retained earnings 360,000.00 202,440.00 - 72,000.00 490,440.00
Noncontrolling interest 90,000.00 9,360.00 - 7,200.00 92,160.00
Conso SHE 1,050,000.00 211,800.00 1,182,600.00
COST METHODS KASI DI NAGBAGO YUNG INVT IN SUBS

COST METHOD KASI NAGRECORD NG DIVIDENDS INCOME. PAG EQUITY METHOD KASI ILELESS TO SA INVT IN SUBS

------> no control premium because fv of subs is 465,000.00

------> sa dec 31 20x4 she mo kukunin kasi di given yung jan 1 20x4 na trial balance he

AMORTIZATION EIMINATING ENTRIES AFFECTING NET INCOME

- 6,000.00 1. Elimination of intercompany transactions
2. Amortization of exCESS
- 12,000.00
6,000.00 ALL PRIOR PERIOD EE,ALL REAL ACCOUNTS, WALANG NOMINAL
- 1,200.00 CURRENT PERIOD EE, BOTH REAL AND NOMINAL
- 13,200.00
- 3,750.00
- 16,950.00
 Partial GW
Parent Subs Conso 20x5
540,000.00 360,000.00 900,000.00
216,000.00 192,000.00 408,000.00
324,000.00 168,000.00 492,000.00
38,400.00 - - 38,400.00 -
- 60,000.00 - 24,000.00 - 6,000.00 - 90,000.00
- - - 1,200.00 - 1,200.00
- 72,000.00 - 54,000.00 - 126,000.00
- - -
230,400.00 90,000.00 274,800.00

- 38,400.00

-7,200.00
192,000.00 82,800.00 274,800.00
-
192,000.00 82,800.00
- 16,560.00 - 16,560.00
192,000.00 66,240.00 258,240.00

20x5 conso NI Dividends 12/31/20x5

600,000.00
258,240.00 - 72,000.00 676,680.00
16,560.00 - 9,600.00 101,370.00
274,800.00 1,378,050.00

20x5 conso NI Dividends 12/31/20x5

- 600,000.00
258,240.00 - 72,000.00 676,680.00
16,560.00 - 9,600.00 99,120.00
274,800.00 1,375,800.00
O SA INVT IN SUBS