Question
Problem 5 On January 1, 2020, Sweet Co. acquired 80% in the Sixteen Inc. On acquisition date, Sixteen's net identifiable assets have a carrying amount
Problem 5
On January 1, 2020, Sweet Co. acquired 80% in the Sixteen Inc. On acquisition date, Sixteen's net identifiable assets have a carrying amount of P296,000. Sixteen's identifiable assets approximated their fair values except for inventory with carrying amount of P92,000 and fair value of P124,000 and equipment with carrying amount of P160,000 and fair value of P192,000. The remaining useful life of the equipment is 4 years. Non-controlling interest was measured using the proportionate share method. Information on December 31, 2020 is as follows:
Sweet Co. Sixteen Inc.
Assets
Cash 392,000 316,000
Inventory 420,000 60,000
Investment in Subsidiary (at cost) 300,000 ----
Equipment, net 560,000 120,000
Total Assets 1,672,000 496,000
Liabilities and Equity
Trade and other payables 292,000 120,000
Share capital 940,000 200,000
Retained earnings 440,000 176,000
Total equity 1,380,000 376,000
TOTAL LIABILITIES & EQUTY 1,672,000 496,000
Revenues 1,000,000 200,000
Expenses (400,000) (120,000)
PROFIT FOR THE YEAR 600,000 80,000
No dividends were declared by either entity during 2020. There were also no intercompany transactions and no impairment of goodwill.
17. How much is the net change in the fair value of the subsidiary's net assets since the acquisition date? ___________.
18. What amount of goodwill is reported in the December 31, 2020 consolidated financial statements? __________.
19. What amount of goodwill is attributed to non-controlling interests on December 31, 2020? __________.
20. How much is the consolidated total assets on December 31, 2020? __________.
21. How much is the non-controlling interest in the net assets of the subsidiary on December 31, 2020? __________.
22. How much is the consolidated retained earnings on December 31, 2020? __________.
23. How much is the consolidated total equity on December 31, 2020 attributed to owners of the parent company? __________.
24. How much is the consolidated total equity on December 31, 2020 attributed to non-controlling interest? __________.
25. How much is the consolidated profit in 2020? __________.
26. How is the consolidated profit the attributed to the owners of the parent?
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Managerial Accounting
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
12th Edition
978-0073526706, 9780073526706
