ACCT602_MQ4 Inventories 62,500

Patent 61,250
Problem 1. Balance sheet data for P Corporation and S Goodwill ?
Company on December 31, 2015 are given below: Equipment 31,250
Bonds Payable 15,650
P Corp. S Co. Investment in Watson 468,750
Cash 70,000 90,000 Non-Controlling Interest ?
Merchandise Inventory 100,000 60,000 Included in the purchase price is a control premium of P68,750.
PPE 500,000 250,000 Calculate the amount of goodwill in the consolidated statement
Investment in S Company 260,000 of financial position on July 1, 2015 assuming:
Total Assets 930,000 400,000 a. Non-controlling interest is measured at fair value
b. Non-controlling interest is measured at proportionate
share
Current Liabilities 180,000 60,000 c. Non-controlling interest share in goodwill when is
Long Term Liabilities 200,000 90,000 measure at fair value at its fair value is given at
P1,150,000.
Common Stock 300,000 100,000
Retained Earnings 250,000 150,000 Problem 4. On December 31, 2013, Defoe Corporation acquired
Total Liabilities and Equity 930,000 400,000 80 percent of Crusoe Company's common stock for Php104,000
cash. Defoe elected to measure NCI using fair value method.
P Corporation purchased 80% interest in S Company on The fair value of the non-controlling interest at that date was
December 31, 2015 for P260,000. S Company’s property and determined to be Php20,000. Data from the balance sheets of
equipment had a fair value of P50,000 more than the book value the two companies included the following amounts as of the date
shown above. All other book values approximated fair value. Fair of acquisition:
value method was elected to be used used in measuring the Defoe Crusoe
non-controlling interest. Fair value of non-controlling interest on
Cash 90,000.00 20,000.00
acquisition date was P58,000. In the consolidated balance sheet
on December 31, 2015: Accounts Receivable 80,000.00 35,000.00
Inventory 100,000.00 40,000.00
a. The amount of total stockholders’ equity to be reported Land 40,000.00 60,000.00
will be: 610,000
Building and Equipment 200,000.00 60,000.00
b. The amount of non-controlling interest will be: 60,000
Investment in Crusoe 104,000.00 -
Problem 2. On January 1, 2015, Sabina Corporation purchased Total Assets 614,000.00 215,000.00
75% of the common stock of Argo Company. Separate balance
sheets for the companies at the date of acquisition are given
below: Accounts Payable 120,000.00 30,000.00
Mortgage Payable 200,000.00 100,000.00
Sabina Argo Ordinary Share 50,000.00 25,000.00
Cash 12,000 103,000 Retained Earnings 244,000.00 60,000.00
Accounts Receivable 72,000 13,000 Total Liabilities and Stockholders' Equity 614,000.00 215,000.00
Inventory 66,000 19,000
On that date, the book values of Crusoe's assets and liabilities
Land 39,000 16,000 approximated fair value except for inventory, which had a fair
Plant Assets 350,000 150,000 value of Php45,000, and buildings and equipment, which had a
Acc. Dep. (120,000) (30,000) fair value of Php100,000. The mortgage payable of Crusoe is
Investment in Argo 196,000 also determined to have a fair value of Php 120,000. At
December 31, 2013, Defoe reported accounts payable of
Total Assets 615,000 271,000 Php15,000 to Crusoe, which reported an equal amount in its
accounts receivable.
Required: Compute for the following in the consolidated financial
Accounts Payable 103,000 71,000 statements:
Capital Stock 400,000 150,000 a. Goodwill 16k
Retained Earnings 112,000 50,000 b. Total Current Assets 355k
c. Total Assets 771k
Total Liabilities and Equity 615,000 271,000
d. Total Liabilities 455k
e. Non-controlling interest 22k
At the date of combination, the book values of Argo’s net assets f. Total Shareholders’ Equity 316k
were equal to the fair value except for Argo’s inventory which
has a fair value of P30,000. Full goodwill method is to be used. Problem 5. Pateros Corporation, issues 500,000 shares of its
own P10 par common stock for the net assets of Samar
a. What amount of goodwill is associated to the non- Corporation in a merger consummated on July 1, 2014. On this
controlling interest? 12,583 date, Pateros stock is quoted at P11.95 per share. Summary
b. What amount of total liability will be reported? 174k balance sheet data for the two companies at July 1, 2014, just
c. What is the amount of total assets? 751333 before the combination, are as follows:

Problem 3. On July 1, 2015, Lander Inc, acquired most of the Pateros Samar
outstanding common stock of Watson Co for cash. The Current Assets 18,000,000 1,500,000
incomplete working paper elimination entries on that date for the Plant Assets 22,000,000 6,500,000
consolidated statement of financial position of Lander Inc. and its
subsidiary are shown next: Total Assets 40,000,000 8,000,000
Liabilities 12,000,000 2,000,000
Common Stock – Watson 1,500,000
APIC – Watson 750,000 Common Stock - P10 par 20,000,000 3,000,000
RE – Watson 187,500 Additional paid in Capital 3,000,000 1,000,000
Investment in Watson 1,828,125
Non Controlling Interest ? Retained Earnings 5,000,000 2,000,000
Total Equities 40,000,000 8,000,000

Calculate the Retained Earnings Pateros Corporation would