Business Combination
1. The balance sheets of Palisade Company and Salisbury Corporation were as follows on December 31. 2010: Palisade Salisbury Current Assets P260,000 P120,000 Equipment-net 440,000 480,000 Buildings-net 600,000 200,000 Land 1.0.0.000 20.09.00 Total Assets P1,Q_0_0,0_0_0 131.000.0011 Current Liabilities 100,000 120,000 Common Stock, P5 par 1,000,000 400,000 Additional paid-in Capital 100,000 280,000 Retained Earnings , m, Total Liabilities and Stockholders equity P1390000 131,090,090 On January 1, 2011 Palisade issued 30,000 of its shares with a market value of P40 per share in exchange for all of Salishury's shares, and Salisbury was dissolved. Palisade paid P20,000 to register and issue the new common shares. It cost Palisade P50,000 in direct combination costs. Book values equal market values except that Salisbury's land is worth P250,000. Renamed: Prepare a Palisade balance sheet after the business combination on January 1, 2011. 2. On january 2, 2020, Popol corporation purchase 80% of Seed Company's common stock for P216,000. P10,000 of the excess is attributed to goodwill and the balance to a depreciable asset with an economic life of 10 years. On the date of acquisition, Seed reported common stock outstanding of P80,000 and retained earnings of P140000, and Popol reported common stock outstanding of P350000 and retained earnings of P520000. On December 31, 2020, Seed reported a comprehensive income of P35,000 and paid dividends of P15,000. Popol reported CI from separate operations of P95,000 and paid dividends of P46,000. Goodwill had been impaired and should be reported at P2,000 on December 31,2013. 1. What is the consolidated CI on December 2020? 2. What is the consolidated retained earnings on December 2020? 3. How much is the NC] on CI of the subsidiary on December 2020? 4. What is the balance of NCI on December 31, 2020? 5. What is the consolidated CI attributable to parent on December 31,2013? 3. P010 Company purchased 60% of Star Company's voting stocks for P252.000 on january 1, 2017. Star reported a total equity of P400.000 at the time of acquisition. The excess is allocated to equipment with an expected life of 10 years from acquisition date. During 2020, Polo purchased inventory for P20,000 and sold the full amount to Star Company for P30,000. On December 31, 2020, Star's ending inventory included P6,000 of items purchased from Polo. Also in 2020, Star purchased inventory for P50,000 and sold the units to Polo for P80,000. Polo included P20,000 of its purchase from Star in ending ..._._._..-.._. _._ n-_-...l_-.. nnnn 4. What is the balance of NCI on December 31, 2020? 5. What is the consolidated CI attributable to parent on December 31, 2013'? 3. P010 Company purchased 60% of Star Company's voting stocks for P252,000 on [anuary 1, 2017. Star reported a total equity of P400,000 at the time of acquisition. The excess is allocated to equipment with an expected life of 10 years from acquisition date. During 2020, Polo purchased inventory for P20,000 and sold the full amount to Star Company for P30,000. On December 31, 2020, Star's ending inventory included P6,000 of items purchased from Polo. Also in 2020, Star purchased inventory for P50,000 and sold the units to Polo for P80,000. Polo included P20,000 of its purchase from Star in ending inventory on December 2020. The comprehensive income of two companies revealed the following: Polo Star Sales 400,000 200,000 Dividend income 25,000 0 Total income 425, 00d 200, 000 Cost of goods sold 250,000 120,000 Other expenses 70,000 35,000 Total expenses 320.000] 155.000 Comprehensive Income 105.00d 45.000 1. What is the amount of consolidated sales in 2020? 2. What is the amount of consolidated cost of goods sold for 2020? 4. 0n [anuary 1, 2020. P Company purchased 80% of the outstanding shares of 8 Company at a cost of P700000. On that date, 5 Company had P300000 of capital stock and P500,000 of retained earnings. For 2020, P Company had CI of P300,000 from its own operations and paid dividends of P50,000. For 2020, 8 Company reported CI of P150,000 and paid dividends of P50,000. All of the assets and liabilities of 8 Company had a book value approximately equal to fair values. On April 1, 2020, 5 Company sold equipment with a book value of P30,000 to P for P60,000. The gain on sale is included in the CI of 8 Company indicated above. The equipment is expected to have a useful life of 5 years from the date of the sale. Required: Compute consolidated CI attributable to parent for 2020
