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Chapter 5 - Consol. FS Part 2

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101 views4 pages

Chapter 5 - Consol. FS Part 2

Uploaded by

Jayson Abayon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Page |1

Use the following for the next three questions:


Dream Co. owns 75% interest in Theater Co. The following transactions occurred during
the year:
a) Dream Co. sold goods costing ₱20,000 to Theater Co. for ₱38,000. Theater Co. held
₱9,500 of these goods in its ending inventory.
b) Theater Co. sold goods to Dream Co. for ₱40,000. The gross profit rate is 20% based
on sale price. Dream Co. sold one-fourth of the goods to unrelated parties during the
year.

The individual statements of profit or loss of the entities during the year show the
following information:
Dream Theater
Co. Co.
Sales 1,000,000 700,000
(400,000
Cost of sales
) (350,000)
Gross profit 600,000 350,000

The entities held the following inventories at year-end:


Dream Theater
Co. Co.
300,0
Ending inventory
00 80,000

1. How much is the consolidated ending inventory?


a. 356,900
b. 369,500
c. 372,600
d. 386,500

2. How much are the consolidated sales?


a. 1,622,000
b. 1,682,000
c. 1,700,000
d. 1,702,000

3. How much is the consolidated cost of sales


a. 652,200
b. 682,500
c. 685,200
d. 686,200

Use the following information for the next three questions:


At the beginning of Year 1, Blue Co. acquires 80% interest in Sky Co. Information on Sky
Co.’s equipment on this date is as follows:
Carrying
Fair value
amount
Equipment, gross 1,050,000 1,470,000
Accumulated
(210,000) (378,000)
depreciation
Equipment, net* 840,000 1,092,000
* The remaining useful life is 6 years.
Page |2

Immediately after the business combination, Blue Co. purchases a piece of equipment
from Sky Co. for ₱252,000. Sky Co.’s original cost for the equipment is ₱210,000. The
accumulated depreciation is ₱42,000. The remaining useful life is 4 years.

Information at the end of Year 1 is as follows:


Blue
Sky Co.
Co.
3,990,00
Equipment, gross 1,302,000
0
(1,176,0
Accumulated depreciation (483,000)
00)
Depreciation expense 798,000 273,000

4. How much is the consolidated Equipment, gross?


a. 5,380,000
b. 5,470,000
c. 5,560,000
d. 5,670,000

5. How much is the consolidated Accumulated depreciation?


a. 1,740,000
b. 1,890,000
c. 1,990,000
d. 2,089,000

6. How much is the consolidated Depreciation expense?


a. 1,092,000
b. 1,098,000
c. 1,102,000
d. 1,128,000

Use the following information for the next three questions:


Ice Co. owns 75% interest in Fire Co. On acquisition date, the carrying amount of Fire
Co.’s net identifiable assets was ₱240,000, equal to fair value. Non-controlling interest
was measured using the proportionate share method.

In 20x1, Fire Co. declared ₱100,000 dividends. Selected information on the entities on
December 31, 20x1 is shown below:
Ice Co. Fire Co.
Share capital 800,000 200,000
Retained earnings 280,000 120,000
Total equity 1,080,000 320,000

Profit or loss 475,000 132,000

7. How much is the non-controlling interest in the net assets of the subsidiary as of year-
end?
a. 80,000
b. 86,000
c. 90,000
d. 91,382

8. How much are the consolidated retained earnings as at year-end?


a. 228,000
b. 276,000
c. 280,000
Page |3

d. 340,000

9. What amounts of the consolidated profit are attributed to the following?


Owners of parent NCI
a. 399,000 133,000
b. 433,000 99,000
c. 499,000 33,000
d. 533,000 133,000

Use the following information for the next five questions:


On January 1, 20x1, Walk Co. acquired 75% interest in Run Co. On this date, Run Co.’s
net identifiable assets had a carrying amount of ₱208,000, equal to fair value. Non-
controlling interest was measured using the proportionate share method.

On December 31, 20x1, Run Co. purchased all of the outstanding bonds of Walk Co. from
the open market for ₱320,000. There were no other intercompany transactions during the
year. The year-end individual financial statements show the following information:

Walk Co. Run Co.


ASSETS
Investment in subsidiary (at
cost) 234,000 -
Investment in bonds - 320,000
Other assets 650,000 64,000
TOTAL ASSETS 884,000 384,000

LIABILITIES AND EQUITY


Accounts payable 52,000 150,000
Bonds payable (at face amount) 300,000 -
Total liabilities 352,000 150,000
Share capital 350,000 150,000
Retained earnings 182,000 84,000
Total equity 532,000 234,000
TOTAL LIABILITIES AND
884,000 384,000
EQUITY

Walk
Run Co.
Co.
Revenues 390,000 156,000
(282,10
Operating expenses (130,000)
0)
Interest expense (3,000) -
104,90
Profit for the year 26,000
0

10. How much is the gain (loss) on extinguishment of bonds to be recognized in the 20x1
consolidated statement of profit or loss?
a. 20,000
b. (20,000)
c. 30,000
d. 0

11. How much is the NCI in net assets as of December 31, 20x1?
a. 67,500
b. 66,600
c. 59,700
Page |4

d. 58,500

12. What amount of retained earnings is reported in the consolidated financial


statements?
a. 168,500
b. 181,500
c. 188,500
d. 201,500

13. What amounts of the consolidated profit are attributed to the following?
Owners of parent NCI
a. 145,000 5,900
b. 144,400 6,500
c. 109,400 1,500
d. 104,400 6,500

14. How much are the consolidated total assets and consolidated total liabilities?
Total assets Total liabilities
a. 1,080,000 70,000
b. 1,080,000 220,000
c. 792,000 202,000
d. 792,000 263,000

“What we think, we become.” - Buddha

- End –

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