PROBLEM 3: EXERCISE On January 1, 20x1, Day Co. acquired 75% interest in Night Co. for P216,000. On this date, the carrying amount of Night's net identifiable assets was P192,000, equal to fair value. Non- The financial statements of the entities on December 31, 20x1 show the following information: controlling interest was measured at a fair value of P72,000. No dividends were declared by either entity during 20x1. 1. Day Co. Night Co. ASSETS Investment in subsidiary (at cost) Other assets TOTAL ASSETS 216,000 720,000 936,000 282,000 282,000 LIABILITIES AND EQUITY Liabilities Share capital Retained earnings 84,000 720,000 132,000 852,000 936,000 30,000 120,000 132,000 252,000 282,000 Total equity TOTAL LIABILITIES AND EQUITY Revenues Operating expenses Profit for the year Day Co. 360,000 (72,000) 288,000 Night Co. 96,000 (36,000) 60,000 Additional information: There were no intercompany transactions during the period. PROBLEM 3: EXERCISE On January 1, 20x1, Day Co. acquired 75% interest in Night Co. for P216,000. On this date, the carrying amount of Night's net identifiable assets was P192,000, equal to fair value. Non- The financial statements of the entities on December 31, 20x1 show the following information: controlling interest was measured at a fair value of P72,000. No dividends were declared by either entity during 20x1. 1. Day Co. Night Co. ASSETS Investment in subsidiary (at cost) Other assets TOTAL ASSETS 216,000 720,000 936,000 282,000 282,000 LIABILITIES AND EQUITY Liabilities Share capital Retained earnings 84,000 720,000 132,000 852,000 936,000 30,000 120,000 132,000 252,000 282,000 Total equity TOTAL LIABILITIES AND EQUITY Revenues Operating expenses Profit for the year Day Co. 360,000 (72,000) 288,000 Night Co. 96,000 (36,000) 60,000 Additional information: There were no intercompany transactions during the period