Profit for the year 337,200 Profit attributable to owners of the parent (Step 7) 322,20 0 Profit attributable to NCI

(Step 7) 1

Step 5: Consolidated retained earnings Parent's retained earnings – Dec. 31, 20x1 420,000 Consolidation adjustments: Parent
ofit attributable to NCI (Step 7) 15,00 0 Profit for the year 337,20 0 3. Solutions: Step 1: Analysis of effects of intercompany transaction T

Consolidation adjustments: Parent's sh. in the net change in Sub.'s net assets (a) 90,000 Unrealized profits (Downstream only) - Gain or los
ects of intercompany transaction The dividends declared by the subsidiary are allocated as follows: Total dividends declared ₱150,000 All

ts (Downstream only) - Gain or loss on extinguishment of bonds - Impairment loss on goodwill attributable to Parent - Net consolidation a
l dividends declared ₱150,000 Allocation: Owners of the parent (150,000 x 75%) 112,500 Non-controlling interest (150,000 x 25%) 37,5

ble to Parent - Net consolidation adjustments 90,00 0 Consolidated retained earnings – Dec. 31, 20x1 510,000 (a) ₱120,000 Net change
ing interest (150,000 x 25%) 37,500 As allocated ₱150,000 Step 2: Analysis of net assets Subsidiary Acquisition date Consolidation date

10,000 (a) ₱120,000 Net change in subsidiary’s assets (Step 2) x 75% Step 6: Consolidated profit or loss Parent Subsidiar y Consolidated
cquisition date Consolidation date Net change Net assets at carrying amts. 360,000 480,000 Fair value adjustments at acquisition date -

Parent Subsidiar y Consolidated Profits before adjustments 712,500 198,000 910,500 Consolidation adjustments: Unrealized profits -
adjustments at acquisition date - - Subsequent depreciation of FVA NIL - Unrealized profits (Upstream only) NIL - Subsidiary's net assets a

adjustments: Unrealized profits - - - Dividend income from subsidiary (112,500) N/A (112,500) Gain or loss on extinguishment of bonds -
nly) NIL - Subsidiary's net assets at fair value 360,000 480,000 120,000 Step 3: Goodwill computation We can leave out this step because

loss on extinguishment of bonds - - - Net consolidation adjustments (112,500) - (112,500) Profits before FVA 600,00 0 198,000 798,000
We can leave out this step because the information is insufficient. Step 4: Non-controlling interest in net assets Sub.'s net assets at fair valu

e FVA 600,00 0 198,000 798,000 Depreciation of FVA ( - ) ( - ) ( - ) Impairment loss on goodwill ( - ) ( - ) ( - ) Consolidated profit 600,000
assets Sub.'s net assets at fair value – Dec. 31, 20x1 (Step 2) 480,000 Multiply by: NC

) ( - ) Consolidated profit 600,000 198,000 798,000 Step 7: Profit or loss attributable to