On January 1, 2014, GININTUANG PUSO CORPORATION acquired 80% of the outstanding shares of BAGAL SULONG

COMPANY for P743,750. At this date, the stockholders' equity of BAGAL SULONG follows:
Ordinary shares, P5 par P 350,000
APIC 175,000
Retained earnings 175,000
P 700,000
The net assets of BAGAL SULONG on January 1, 2014 were fairly valued. GININTUANG PUSO assigned the full fair value to the
non-controlling interest at the date of acquisition in analyzing the fair value of its investment.
Selected information over the first two (2) years of affiliated operations follows:
 Intercompany merchandise sales are summarized as follows:
Purchaser's
Date Transaction Sales Amount GPR Remaining Ending
Inventory
In 2014 Downstream P 61,250 30% P 15,750
Upstream 35,000 25% 6,125
In 2015 Downstream 56,000 30% 10,500
Upstream 52,500 25% 5,250

 Condensed trial balances of the two (2) companies on December 31, 2015 follow:
GININTUANG BAGAL
PUSO CORP. SULONG COMPANY
Current assets P 1,428,000 P 387,275
Investment in BAGAL SULONG 743,750 ---
Equipment, net 1,891,750 262,500
Buildings, net 1,592,500 332,500
Goodwill 105,000 ---
Liabilities (1,123,500) (186,025)
Common Stocks, PI par ( 437,500) ---
Ordinary shares, P5 par (350,000)
APIC (2,187,500) (175,000)
Retained earnings, January 1, 2015 (1,933,750) (245,000)
Sales (1,540,000) (1,102,500)
Dividend income ( 42,000) ---
Cost of goods sold 1,232,000 882,000
Other expenses 227,500 141,750
Dividends declared 43,750 52,500
Totals P0 P0
1. Compute the consolidated cost of goods sold for 2015.
A. P2,003,707 C. P2,500,553
B. P2,050,355 D. P2,535,050
2. .Compute the consolidated net income for 2015.
A. P161,043 C. P215,915
B. P195,125 D. P251,195
3. Compute the amount of the consolidated net income for 2015 attributable to the parent's shareholders.
A. P143,482.50 C. P175,500.50
B. P 145,249 D. P195,030
4. Compute the amount of consolidated net income attributable to the non-controlling interest
A. A. P 15,732.50 C. P 19,624.50
B. B. P 15,794 D. P 20,885

Problem 2
On January 1, 2019, Entity A acquired 60% of outstanding ordinary shares of Entity B at a gain on bargain
purchase of P 40,000. For the year ended December 31, 2020. Entity A and Entity B reported sales revenue
of P 2,000,000 and P 1,000,000 in their respective separate income statements. At the same year, Entity A
and Entity B reported cost of goods sold P 1,200,000 and P 700,000 in their respective separate income
statements.

During 2019, Entity A sold inventory to Entity B at a selling price of P 280,000 with gross profit rate of 40%
based on cost. On the other hand. Entity B sold inventory to Entity A at a selling price of P 400,000 with
gross profit rate 30% based on sales during 2020.
On December 31, 2019, 25% of the goods sold coming Entity A remained in Entity B’s inventory but all are
eventually sold to third persons during 2020. As of December 31,2020 40% of the goods coming from
Entity B were eventually sold to third persons.

For the year ended December 31, 2020, Entity A reported net income of P 500,000 while Entity B reported
net income of P 200,000 and distributed dividends of P 50,000. Entity A accounted for its inventory in
Entity B using cost method in its separate financial statements.

5. What is the consolidated sales revenue for the year ended December 31,2020?

a. P 2,600,000
b. P 2,320,000
c. P 3,000,000
d. P 2,720,000

6. What is the consolidated gross profit for the year ended December 31,2020?

a. P 1,120,000
b. P 1,048,000
c. P 1,028,000
d. P 1,152,000

7. What is the nocontrolling interest in net income for the year ended December 31,2020?

a. P 100,800
b. P 59,200
c. P 51,200
d. P 88,000

8. What is the consolidated net income attributable to parent’s shareholders for the year ended December
31,2020?

a. P 766,800
b. P 596,800
c. P 606,800
d. P 566,800

ABC Corporation owns 75 percent of XYZ Company's voting shares. During 2018, ABC produced 50,000
chairs at a cost of P79 each and sold 35,000 chairs to XYZ for P90 each. XYZ sold 18,000 of the chairs to
unaffiliated companies for P117 each prior to December 31, 2018, and sold the remainder in early 2019 for
P130 each. Both companies use perpetual inventory systems.

9. Based on the information given above, what amount of cost of goods sold must be eliminated from the
consolidated income statement for 2018?
A. P2,765,000 B. P1,620,000 C. P1,422,000 D. P2,963,000

10. Based on the information given above, what amount of cost of goods sold must be eliminated from the
consolidated income statement for 2019?
A. P187,000 B. P221,000 C. P1,422,000 D. P2,963,000
P Company acquires a 90% in corporation at book value on January 1, 2015. Intercompany purchases
and sales and inventory data for 2015, 2016 and 2017 are as follows:

Sales by S to P Intercompany profit in P’s inventory at December 31

2015 P 2,000,000 P 150,000
2016 P 1,500,000 P 120,000
2017 P 3,000,000 P 240,000
Selected data from the financial statements of P and S for the year ended December 31, 2017

Income Statement P S
Sales P 9,000,000 P 6,000,000
Cost of Sales P 6,250,000 P 3,000,000
Expenses P 2,250,000 P 1,500,000
Income from S P1,242,000
11. Consolidated sales for 2017 must be
a. 15,000,000 b. 12,000,000 c. 9,000,000 d. 6,000,000
12. Consolidated cost of sales for 2017 must be
a. 9,250,000 b. 6,250,000 c. 6,490,000 d. P 6,370,000
13. Consolidated net income for 2017 must be
a. P 1,242,000 b. 1,742,000 c. 2,000,000 d. 1,880,000

Perth Corporation owns 90 percent of Dundee Company's stock. At the end of 2008, Perth and
Dundee reported the following partial operating results and inventory balances:
Perth Dundee
Total sales P500,000 P350,000
Sales to Dundee Company P100,000
Sales to Perth Corporation P150,000
Net Income P15,000
Operating income (excluding income
From Dundee Corp) P56,000
Inventory on hand, 12/31/2008
Purchased from Dundee P36,000
Purchased from Perth P42,000
Perth regularly prices its products at cost plus a 30 percent markup for profit. Dundee prices its
sales at cost plus a 10 percent markup. The total sales reported by Perth and Dundee include both
intercompany sales and sales to nonaffiliates.
14. Based on the information given above, what amount of sales will be reported in the
consolidated income statement for 2008?
A. P500,000 B. P850,000 C. P600,000 D. P800,000
15. Based on the information given above, what balance will be reported for inventory in the
consolidated balance sheet for December 31, 2008?
A. P56,573 B. P23,846 C. P32,727 D. P67,000