CONSOLIDATED FINANCIAL STATEMENT
On January 1, 2015, Parco company purchased 80% of the outstanding shares of Subco company by paying 340,000, the Subco company's common stock and retained earnings on this date amounted to 150,000 and 230,000 respectively. Also, on this date, an equipment is undervalued by 20,000 with a remaining life of 10 years. On January 1, 2017, Subco company had 150,000 of capital stock and 300,000 of retained earnings. Also, on the same date, Parco company had 1,000,000 of capital stock and 700,000 of retained earnings. During the year, Parco company sold merchandise to Subco for 60,000 and in turn . purchased 40,000 from Subco company. Inter-company sales of merchandise were made at the following gross profit rates: Sales made by parent 25% based on cost Sales made by subsidiary 20% based on sales On December 31, 2017, 30% of all intercompany sales remain in the ending inventory of the purchasing affiliate. The beginning inventory of Parco company includes 2,500 worth of merchandise acquired from Subco company on which Subco company reported a profit of 1,000. While, the beginning inventory of Subcoalo includes 3,000 of merchandise acquired from Parco company at 35% mark up. Using the cost method, the following selected results of operation for 2017 were as follows Parco company Subco company Dividends paid 60,000 10,000 Net income from own operation 100,000 30,000 Add dividend income 8,000 Net income 108,000 30,000 1. Dividend income of Parco company for 2017 should be: a. 18,330 c. 8,000 b. 10,000 d. 8,200 2. Balance of investment in Subco company as of December 31, 2017 should be: a. 354,600 b. 351,960 c. 350,330 d. 340,000 3. the non-controlling interest in net income for 2017 should be: a. 6,280 c. 5,720 b. 6,120 d. 5,320 4. the profit attributable to equity holders of parent/controlling interest in net income for 2017 a. 122,600 c. 118,570 b. 118,730 d. 118,330 5. the consolidated net income a. 124,050 C. 118,570 b. 122,600 d. 118,330 6. the consolidated retained earnings on December 31, 2017 a. 700,000 c. 753,000 b. 752,000 d. 809,680 7. the stockholder's equity of subsidiary on December 31, 2017 a. 450,000 c. 481,600 b. 470,000 d. 484,000 8. the non controlling interest in net asset using proportionate share basis on December 31, 2017 a. 97,120 c. 96, 320 b. 96, 920 d. 73,520 9. NCi in net asset using full fair value basis of full goodwill approach should be: a. 101,320 c. 96,320 b. 96,920 d. 73,520 10. consolidated stockholder's equity on December 31, 2017 using proportionate share basis a. 1,911,000 c. 1,905,920 b. 1,906,000 d. 1,740,000 11. consolidated stockholder's equity using the full goodwill basis on December 31, 2017 should be: a. 1,911,000 b. 1,906,000 c. 1,905,920
