Assume that instead of paying cash, P company issued 9,000 shares of its P10 par value common stock

for 80% (9,0

the outstanding shares of S company. The fair value of P company's stock is P50 and the fair value of the 20% NCI i
be P124,000. P company also pays 50,000 in professional fees to accomplish the acquisition.

(1) To record the acquisiotion of S Company stock:

Investment in S Co. (9,000 shares × P50) ₱450,000
Common stock (9,000 shares × P10) ₱90,000
Additional paid-in capital 360,000

(2) To record acquisition-related costs:

Retained earnings - P co. (Acquisition expense) ₱50,000
Cash ₱50,000

Price paid ₱450,000

Non-controlling interest (NCI) 124,000
Total ₱574,000
Less fair value of net assets acquired 620,000
Income from acquisition (₱46,000)

D&A Schedule
Fair value Parent (80%)
Fair value of subsidiary ₱574,000 ₱450,000
Less book value of interest acquired
Common stock ₱20,000
Additional paid-in capital 180,000
Retained earnings 120,000
Total equity ₱320,000 ₱320,000
Interest acquired 80%
Book value ₱256,000
Excess ₱254,000 ₱194,000
Adjustment of identiafiable accounts:
Inventory (110,000 - 100,000) -₱ 10,000
Land (130,000 - 80,000) - 50,000
Buildings (net) (500,000 - 300,000) - 200,000
Equipment (net) (120,000 - 80,000) - 40,000
Total (₱300,000)
Income from acquisition (₱46,000)

Common stock - S company 20,000

Additional paid-in capital - S company 180,000
Retained earnings - S company 120,000
Investment in S company 256,000
Non-controlling interest (NCI) 64,000

Inventory 10,000
Land 50,000
Buildings (net) 200,000
Equipment (net) 40,000
Investment in S company 194,000
Non-controlling interest (NCI) 60,000
Retained earnings - P company (gain) 46,000

P Company and S Company

Consolidation Working Paper
December 8, 2021
Eliminations and Adjustments
P Company S Company
Debit Credit
Assets
Cash ₱168,000 -
Accounts receivable 144,000 40,000
Inventory 160,000 100,000 (2) ₱10,000
Land 200,000 80,000 (2) 50,000
Buildings (net) 840,000 300,000 (2) 200,000
Equipment (net) 400,000 80,000 (2) 40,000
Investment in Santos Co. 450,000 (1) 256,000
(2) 194,000
Total ₱2,362,000 ₱600,000

Liabilities and Equity

Accounts payable ₱160,000 ₱80,000
Bond payable 400,000 200,000
Common stock:
P Company 490,000
S Company 20,000 (1) 20,000
Additional paid-in capital:
P Company 860,000
 S Company 180,000 (1) 180,000
Retained earnings:
P Company 452,000 (2) 46,000
S Company 120,000 (1) 120,000

NCI to consolidated (1) 64,000

(2) 60,000

Total ₱2,362,000 ₱600,000 ₱620,000 ₱620,000

P Company and S Company

Consolidated Statement of Financial Position
December 8, 2021
Assets
Current Assets
Cash ₱168,000
Accounts receivable 184,000
Inventory 270,000
Total ₱622,000

Non-current assets
Land ₱330,000
Buildings (net) 1,340,000
Equipment (net) 520,000
Total 2,190,000
Total assets ₱2,812,000

Liabilities and Equity

Liabilities
Accounts payable ₱240,000
Bonds payable 600,000
Total liabilities ₱840,000

Stockholder's Equity
Common stock ₱490,000
Additional paid-in capital: 860,000
Retained earnings 498,000

Total controlling equity ₱1,848,000

Non-controlling equity 124,000

Total equity 1,972,000

Total liabilities and equity ₱2,812,000
mmon stock for 80% (9,000 shares) of
r value of the 20% NCI is assessed to
.

NCI (20%)
124,000

₱320,000
20%
₱64,000
60,000
Consolidated

₱168,000
184,000
270,000
330,000
1,340,000
520,000

₱2,812,000

₱240,000
₱600,000

490,000

860,000
 498,000

124,000

₱2,812,000