On January 1, 2022, P Company acquires 80% of the common stock of S Company for P372,000.

At that
time, S Company’s shareholders’ equity is composed of common stock (P10 par), P240,000 and retained
earnings, P120,000. On the other hand, P Company’s shareholders’ equity is composed of common stock
(P10 par), P600,000 and retained earnings, P360,000. Also, the fair value of the non-controlling interest
is P98,200. On the same date, the following assets of S Company had carrying values that were different
from their respective fair values:

Carrying value: Fair value:

Inventory P24,000 P30,000

Land 48,000 55,200

Equipment, net 84,000 180,000

Building, net 168,000 144,000

Other assets and all liabilities of S Company had carrying values approximately equal to their respective
fair values.

On January 1, 2022, the equipment and building had a remaining life of 8 and 4 years, respectively. The
inventories on January 1, 2022, were all sold during 2022 and FIFO inventory costing is used. Goodwill, if
any, is impaired by P5,000 during 2022. No goodwill impairment occurred during 2023. The investment is
to be accounted for using the cost method.

The net income and dividends paid for 2022 and 2023 are as follows:

P COMPANY S COMPANY

2022 2023 2022 2023

Net income 196,800 234,200 60,000 60,000

Dividends paid 72,000 72,000 36,000 48,000

1. Goodwill arising from business combination on January 1, 2022, is

2. How much of the goodwill is attributable to the parent and non-controlling interest,
respectively?
3. How much is the consolidated net income for the year 2022?
4. How much of the 2022 consolidated net income is attributable to the parent and non-controlling
interest, respectively?
5. What amount of retained earnings shall be presented on the consolidated statement of financial
position on December 31, 2022?
6. What amount of non-controlling interest shall be presented on the (1) separate statement of
financial position and (2) consolidated statement of financial position on December 31, 2022?
7. How much is the consolidated net income for the year 2023?
8. How much of the 2023 consolidated net income is attributable to the parent and non-controlling
interest, respectively?
 9. What amount of retained earnings shall be presented on the consolidated statement of financial
position on December 31, 2023?
10. What amount of non-controlling interest shall be presented on the consolidated statement of
financial position on December 31, 2023?

INDEPENDENT SCENARIO: Non-controlling interest is to be measured at its proportionate share basis.

1. Goodwill arising from business combination on January 1, 2022 is

2. How much of the goodwill is attributable to the parent and non-controlling interest,
respectively?
3. How much of the 2022 consolidated net income is attributable to the parent and non-controlling
interest, respectively?
4. What amount of retained earnings shall be presented on the consolidated statement of financial
position on December 31, 2022?
5. What amount of non-controlling interest shall be presented on the consolidated statement of
financial position on December 31, 2022?