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    Use The Following Information For The Next Seven Questions:: Activity 2.4

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    Tine Vasiana Duerme
    Here are the steps to solve this problem: 1) Calculate the acquisition cost of Dallas' 80% investment in Style on 1/1/1991: 80% of Style's net assets on 1/1/1991 of $100,000 is 0.8 * $100,000 = $80,000 2) Calculate Dallas' equity income from Style for 1991: Style's net income for 1991 is $15,000 ($51,000 - $36,000). Dallas' 80% share is 0.8 * $15,000 = $12,000 3) Calculate goodwill on 1/1/1991: Acquisition cost was $80,000 Carrying value of Dallas

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    Use The Following Information For The Next Seven Questions:: Activity 2.4

    Uploaded by

    Tine Vasiana Duerme
    438 views2 pages
    Here are the steps to solve this problem: 1) Calculate the acquisition cost of Dallas' 80% investment in Style on 1/1/1991: 80% of Style's net assets on 1/1/1991 of $100,000 is 0.8 * $100,000 = $80,000 2) Calculate Dallas' equity income from Style for 1991: Style's net income for 1991 is $15,000 ($51,000 - $36,000). Dallas' 80% share is 0.8 * $15,000 = $12,000 3) Calculate goodwill on 1/1/1991: Acquisition cost was $80,000 Carrying value of Dallas

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    Activity 2.4

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    Here are the steps to solve this problem: 1) Calculate the acquisition cost of Dallas' 80% investment in Style on 1/1/1991: 80% of Style's net assets on 1/1/1991 of $100,000 is 0.8 * $100,000 = $80,000 2) Calculate Dallas' equity income from Style for 1991: Style's net income for 1991 is $15,000 ($51,000 - $36,000). Dallas' 80% share is 0.8 * $15,000 = $12,000 3) Calculate goodwill on 1/1/1991: Acquisition cost was $80,000 Carrying value of Dallas

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    438 views2 pages

    Use The Following Information For The Next Seven Questions:: Activity 2.4

    Uploaded by

    Tine Vasiana Duerme
    Here are the steps to solve this problem: 1) Calculate the acquisition cost of Dallas' 80% investment in Style on 1/1/1991: 80% of Style's net assets on 1/1/1991 of $100,000 is 0.8 * $100,000 = $80,000 2) Calculate Dallas' equity income from Style for 1991: Style's net income for 1991 is $15,000 ($51,000 - $36,000). Dallas' 80% share is 0.8 * $15,000 = $12,000 3) Calculate goodwill on 1/1/1991: Acquisition cost was $80,000 Carrying value of Dallas

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    Activity 2.

    Direction: Provide what is asked. Show your solution.

    Use the following information for the next seven questions:


    On January 1, 1991, Dallas, Inc. acquired 80% of Style, Inc.’s outstanding common stock. On that date, the carrying amounts of Style’s
    assets and liabilities approximated their fair values. Non-controlling interest was measured using the proportionate share method.

    During 1991, Style paid P 5,000 cash dividends to its stockholders. Summarized balance sheet information for the two companies
    follows:

    Dallas Style
    12/31/1991 12/31/1991 1/1/1991
    Investment in Style (equity method) 132,000
    Other assets 138,000 115,000 100,000
    Totals 270,000 115,000 100,000

    Common stock 50,000 20,000 20,000


    Additional paid-in capital 80,250 44,000 44,000
    Retained earnings 139,750 51,000 36,000
    Totals 270,000 115,000 100,000

    1. What amount should Dallas report as earnings from subsidiary, in its 1991 income statement? _________________
    2. How much is the acquisition cost of the investment on January 1, 1991? _________________
    3. How much is the goodwill on the business combination? _________________
    4. How much is the non-controlling interest in the net assets of Style on December 31, 1991? ________________
    5. How much is the consolidated retained earnings on December 31, 1991? ________________
    6. How much is the total assets in the consolidated statement of financial position as of December 31, 1991? _____________
    7. What amount of equity attributable to the owners of the parent should be reported in Dallas’ December 31, 1991, consolidated
    balance sheet? _________________

    Use the following information for the next seven questions:


    The following transactions occurred during 20x1:
     On January 1, 20x1, P acquired 80% interest in S1 for P 400,000.
     On December 31, 20x1, S1 acquired 60% interest in S2 for P 200,000.

    The following information has been determined:


    Retained earnings S1 S2
    January 1, 20x1 120,000 40,000
    December 31, 20x1 208,000 112,000

    Fair value of NCI S1 S2


    January 1, 20x1 100,000 192,000
    December 31, 20x1 112,000 168,000

    A summary of the individual statement of financial position of the entities as at December 31, 20x1 is shown below:

    P S1 S2
    Investment in Subsidiary 400,000 200,000 -
    Other assets 800,000 480,000 320,000
    Total assets 1,200,000 680,000 320,000

    Liabilities 120,000 152,000 8,000


    Share capital 480,000 320,000 200,000
    Retained earnings 600,000 208,000 112,000
    Total liabilities and equity 1,200,000 680,000 320,000

    Statements of profit or loss


    For the year ended December 31, 20x1

    Revenues 720,000 408,000 192,000


    Expenses (400,000) (320,000) (120,000)
    Profit 320,000 88,000 72,000
    The carrying amounts of the net identifiable assets of S1 and S2 approximate their fair values at their acquisition dates. The group
    determined that the goodwill to S1 has been impaired by P 40,000 as at December 31, 20x1. There have been no changes in the share
    capitals of S1 and S2 during the year.

    8. How much is the total goodwill as of December 31, 20x1? ___________________


    9. How much is the total NCI in net assets as of December 31, 20x1? _____________
    10. How much is the consolidated retained earnings as of December 31, 20x1? ____________
    11. How much is the consolidated profit or loss in 20x1? _______________
    12. How much are the profit attributable to owners of parent and to the NCIs? Parent: ___________
    NCI in S1 _____________ NCI in S2 _________________

    13. How much is the consolidated total assets as of December 31, 20x1? ________________
    14. How much is the consolidated total equity as of December 31, 20x1? ________________

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