Bshs Case Study
Autor: Tim • December 20, 2018 • 4,461 Words (18 Pages) • 482 Views
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Determine the consolidated equity on Dec. 31, 2011:
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- P1, 430, 000
- P1, 457, 000
- P1, 524, 500
- P1, 526, 000
Answer: C
Consolidated Equity:
Attributable to Equity Holders’ of Parent / Controlling Interest:
Common Stock ________________________________ P 500, 000
Additional Paid-in-Capital _______________________ P 300, 000
Retained Earnings _____________________________ P630, 000
Equity Holders’ of Parent / Controlling Interest ______ P1, 430, 000
NCI [90, 000 + (20, 000 – 5, 000) * 30%] ____________ 94, 500
Consolidated Equity P1, 524, 500
Practical Accounting 2 (2015) – Antonio J. Dayag p. 485 no. 115
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- Sharmayne company has a 90% controlling interest in Cheska company.
On 12.31.2018, the carrying value of the Cheska company’s net assets and in the Sharmayne company’s consolidated financial statements is P100,000 and the carrying amount attributable to the NCI in Cheska is P100,000.
On 01.01.2019, the Sharmayne company sells 80% of the share in Cheska company to a third party for cash proceeds of P120, 000. As a result of the sale, Sharmayne company loses control of Cheska company but retains 10% NCI.
The Fair value of the retained interest on that date is P12,000.
How much is the cash proceeds?
a. P120,000
b. P130,000
c. P140,000
d. P150,000
e. none of the above
answer: A
PM Company acquired a 70% interest in the ST Company in 2016 at a cost equal to its book value. For the year ended December 31, 2018, PM Company and ST Company reported net income from their own operations of Php 170,000 and Php 90,000, respectively.
During 2017, ST sold merchandise to PM for Php 14,000 at a profit of Php 3,000. The merchandise was later resold by PM to outsiders for Php 19,000 during 2018.
What is the consolidated total comprehensive income attributable to parent on December 31, 2018?
A.Php 260 000
B.Php 232 100
C.Php 233 000
D.Php233 900
Solution:
PM Company total comprehensive income from own operations
Php 170 000
ST Company total comprehensive income from own operations
90 000
Total comprehensive income attributable to NCI:
ST net income
Php 90 000
Realized profit in inventory
3 000
Total
93 000
NCI
30%
(27 900)
Consolidated total comprehensive income attributable to parent
B. Php 232 100
Subsequent to Acquisition
Broken Company purchased 80 % of Pinaasa Company’s outstanding common stock. During the year, Broken paid cash dividends of P 75 000, while Sub declared P10 000 cash dividend. On the Year-end consolidated financial statements, what amout should Broken report as Dividends.
Solution:
75 000, only the Parent Company’s dividend is presented in the Consolidated Financial Statement.
- On January 1, 2017, VV Company purchased an 80% investment in BB Company. The price paid was equal to VV’s interest in BB’s net asset at that date.
On January 1, 2017, VV and BB had retained earnings of 1,000,000 and 200,000 respectively.
During 2017:
- Consolidated comprehensive income is 400,000 including NCI net income
- VV declared dividends of 100,000
- BB had net income of 80,000 and declared dividends of 40,000
- There were no other intercompany transactions
On December 31, 2017, what is the consolidated retained earnings?
- 1,300,000
- 1,284,000
- 1,532,000
- 1,540,000
ANSWER: B
Solution
Retained earnings 1/1/2017- VV 1,000,000
Consolidated comprehensive income
attributable to parent:
Consolidated comprehensive income 400,000
NCI net income (20%*80,000) (16,000) 384,000
Dividend declared- VV (100,000)
CONSOLIDATED RETAINED EARNINGS 12/31/2017 P1,284,000
Timmy Co. Acquired 90 percent of Tiny Co. on January 1, 2016 for P 234,000 cash. Tiny’s stockholders equity consisted of common stock of P 160,000 and retained earnings of P 80,000. An
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