On July 1, 2015, Baliwag Company purchased 80% of the outstanding shares of Bicol

Company at a cost of P4,000,000. On that date, Bicol had P2,500,000 of capital stock and
P3,500,000 of retained earnings. All the assets and liabilities of Bicol have book values
equal to their respective fair market values. Non-controlling interests are measured at their
proportionate share in the subsidiary’s net assets. For 2015, Baliwag had income of
P1,400,000 from its separate operations and paid dividends of P750,000. For 2015, Bicol
reported income of P325,000 and paid dividends of P150,000. Assume income was earned
evenly throughout the year except for the intercompany transaction on October 1. On
October 1, 2015, Baliwag purchased a machinery from Bicol for P500,000. The book value
of the machinery on that date was P600,000. The loss of P100,000 is reflected in the
income of Bicol indicated above. The machinery is expected to have a useful life of 5 years
from the date of sale.

In the December 31, 2015 consolidated balance sheet, how much is the consolidated net
income attributable to the parent company?
a. P1,606,000 c. P2,366,000
b. P2,326,000 d. P2,406,000

The contract price stated in a contract of sale is not equal to the transaction price as
determined by IFRS 15. The following could be possible explanation for the difference,
except:
a. There is a variable consideration included in the payment terms.
b. There is a significant financing component in the contract price.
c. There is output VAT included in the contract price.
d. The customer cannot reliably determine the value of the merchandise of the seller.

On January 1, 2015, P Company purchased 32,000 shares of the 40,000

outstanding shares of S Company at a price of P1,200,000 with an excess of
P30,000 over the book value of S Company’s net assets. P13,000 of the excess is
attributed to an undervalued equipment with a remaining useful life of eight years
from the date of acquisition and the rest of the amount is attributed to goodwill. For
the year 2015, P Company reported a net income of P750,000 and paid dividends
of P180,000. While S Company reported a net income of P240,000 and paid
dividends to P Company amounting to P39,000. Goodwill was not impaired in 2015.
The retained earnings of P Company at the end of 2015 per books is P1,025,000. P
Company uses the cost method to account for its investment in S Company. Non-
controlling interest is measured at fair market value.

Compute for the non-controlling interest in net assets on December 31, 2015.
a. P339,875 c. P336,475
b. P334,525 d. P337,925