Question 1

Correct answer: 70000, 70 000

Question 2

Correct answer: P245,000

Question 3

Correct answer: P23,880,000 and P29,670,000

Question 4

Correct answer: Goodwill to be recorded by A on September 1, 2013 => 518,000, Total assets
of A Company after combination => 13,438,000, Total stockholder's equity in the combined
financial statements after combination => 6,308,000
Question 1

Correct answer: a, a, b, d, c, a
Question 2

GOODWILL _____
If Pub had plant assets with book value of P300,000 and fair value of P450,000, how
much plant assets is recorded in the consolidated financial statements?
PLANT ASSETS _____
Correct answer: 180000, 180 000, 560000, 560 000

Question 3

Correct answer: P700,000

Question 4

Correct answer: b
Question 5

Correct answer: b, c

Question 1
Determine the amount to be recorded based on the following acquisition-related costs:

Accountant’s professional fee 100,000

General administrative costs 30,000

Audit fee for stock issue 92,000

SEC registration fee for stock

10,000
issue

Other acquisition costs 12,000

 
Response: Expenses => 142,000
Response: Additional paid-in capital => 102,000
Correct answer: Expenses => 142,000, Additional paid-in capital => 102,000
Score: 4 out of 4 Yes

Question 2
 Brown Corporation paid P120,000 to acquire the net assets of Perk Company. Perk
reported assets with a book value of P90,000 and fair value of P147,000 and liabilities
with book value and fair value of P34,500 on the date of combination. Brown paid
P4,500 for professional fees related to the acquisition. What amount will be recorded as
goodwill by Brown?
Response: P7,500
Correct answer: P7,500
Score: 2 out of 2 Yes

Question 3
 Kopi Company acquires 75% of Pearl Company for P750,000. The company implied
fair value is P970,000. If the fair value of Pearl’s net assets on the date of acquisition is
P800,000 with carrying value of P600,000, determine the
Response: Amount of goodwill (gain) arising from consolidation? => P170,000
Response: Amount of non-controlling interest arising from consolidation? => P220,000
Correct answer: Amount of goodwill (gain) arising from consolidation? => P170,000,
Amount of non-controlling interest arising from consolidation? => P220,000
Score: 4 out of 4 Yes

Question 4
 On January 1, 2018, Box Corp. purchased Mega’s net assets with fair value of
P390,000 by issuing 100,000 shares, P1 par value stock, with fair value of P4.65. It was
further agreed that Box will pay an additional amount on January 1, 2020 if the average
income during the next two years will exceed P60,000 per year. The expected value of
this consideration is at P138,000. On September 2018, within the measurement period,
the contingent consideration was revalued to P127,500 based on additional information.
Determine the following:
Response: Goodwill to be recognized on January 1, 2018 => P213,000
Response: Value of goodwill as of September 2018 => P202,500
Correct answer: Goodwill to be recognized on January 1, 2018 => P213,000, Value of
goodwill as of September 2018 => P202,500
Score: 4 out of 4 Yes
Question 5

Correct answer: Goodwill => P85,000, Stockholder's Equity => P615,000, Total Liabilities =>
P590,000

Question 6
 Glove will issue shares of P5 par value common stock for the net assets of Combo
Company. Glove’s common stock has a current market value of P20 per share. The fair
value of the net assets of Combo is P800,000. How many shares shall be issued to
have an income from acquisition of P100,000?
Response: 35,000 shares
Correct answer: 35,000 shares
Score: 2 out of 2 Yes

Question 7
 Donatello paid P600,000 for the net assets of Italy Corporation which was dissolved.
On the date of purchase, the market value of Italy’s net assets is P700,000. Liabilities
amounted to P40,000. It’s non-current assets were land and equipment with fair values
of P320,000 and P80,000, respectively. At what value will the following be recorded by
Donatello?
Response: Equipment => 80,000
Response: (Income from acquisition) Goodwill => (100,000)
Correct answer: Equipment => 80,000, (Income from acquisition) Goodwill => (100,000)

Question 1

Correct answer: 229,000

Question 2

Correct answer: CI Attributable to parent => 105,000, Consolidated Retained Earnings =>
523,000
Question 3

Correct answer: 1,160,000

Question 4

Correct answer: a

Question 1
 On January 1, 2020, Pops purchased 80% of Sops common stock for P216,000.
P10,000 of the excess is attributed to goodwill and the balance is due to a depreciable
asset with a remaining life of 10 years. Sops’ had common stock of P80,000 and
retained earnings of P140,000. Pop reported common stock of P350,000 and retained
earnings of P520,000. On December 31, 2020, Sops reported comprehensive income of
P35,000 and paid dividends of P15,000, while Pop reported CI from its own operations
of P95,000 and paid dividends of P46,000.

What is consolidated CI? _____

What is consolidated RE? _____
How much is NCI in CI? _____
What is balance of NCI? _____
Correct answer: 126000, 126 000, 593800, 593 800, 6200, 6 200, 57200, 57 200

Question 2
 Star Company, a 90%-subsidiary of Bucks Corporation, declared a dividend of P80,000
and a comprehensive income of P400,000. Amortization of current fair value differences
of Star Company’s identifiable net assets was P50,000. The balance of NCI in CI of
Subsidiary account is:
Response: 35,000
Correct answer: 35,000

Question 1

Correct answer: 71,995

Question 2
Remitted P40,000 to HO for merchandise shipment     
Cash                                    40,000
      Investment in branch                    40,000
Correct answer: True
Question 3
The branch purchased from a local vendor on account for P15,000    
Purchases                                15,000
         Accounts Payable                       15,000
 
Correct answer: False

Question 4
 Dyna Company has been operating a branch in General Luna. Shipments are billed at
cost. At year-end 2020, the branch books has the following balances: Cash at P13,600,
Ending Inventory at P29,600, Home Office P56,000, Shipments from Home Office
P216,000, Sales at P235,200 and Expenses at P21,600. On January 1, 2021, what are
the balances of the following accounts in the books of the Home Office
Correct answer: Investment in Branch => P83,200, Shipments to Branch => P0

Question 5

Correct answer: 23750, 23 750

Question 6
To close the income summary accounts
Investment in branch              10,000
          Branch income                          10,000
Correct answer: True
Question 7
 On Dec. 31, 2020, the investment in branch account on the home office books has a
balance of P100,000. The differences with the HO current account in SD Branch may
be due to:
a. Home office inventory shipment to the branch on December 16 recorded by the
branch in January, 2021 at cost of P20,000
b. Inventory costing P52,000 was sent to the branch by the home office on December
27. The billing was a cost, but the branch recorded the transaction at P48,200.
c. P8,000 branch remittance to the home office in December was recorded on the HO
books on January 2021
d. P12,500 marketing expenses incurred by the home office of which P5,000 is
allocated to the branch. The branch has not recorded this transaction.
e. A remittance of P2,000 from a different branch was recorded as a remittance from SD
Branch.

Unadjusted Balance of the Home Office Account _____

Adjusted Balance of the Reciprocal Account _____
Correct answer: 65200, 65 200, 94000, 94 000

Question 8
The Branch incurred salaries expenses amounting to P20,000    
Salaries                         20,000
     Cash                                        20,000
 
Correct answer: False

Question 9
Received cash of P30,000 from HO
Investment in branch              30,000
          Cash                                        30,000
 
Correct answer: True

Question 10
Received merchandise P50,000 from HO
Shipments from HO      50,000
         Home Office                           50,000
 
Correct answer: False