CHAPTER15

MULTI
PLECHOI
CES-COMPUTATI
ONAL

15-
1: d

Pri
cepaid P4,
000,
000
Lessf
airval
ueofnetasset
sacqui
red(
P6,
100–P2,
800) 3,
300,
000
Goodwil
l P 700,
000

15-
2: a,shoul
dbeP180,
000

Pri
cepai d P 450,
000
Non-control
l
ingi
nter
est(P450,000/90%)x10% 50,
000
Total 500,
000
Lessfairval
ueofnetassetsacquir
ed( P360,
000–P40,
000) 320,
000
Goodwill P 180,
000

15-
3: c

Pl
antassets–Pal
lCompany(
atbookvalue) P 220,
000
Pl
antassets–Mal
lCompany(atf
airv
alue) 180,
000
Consol
idat
ed P 400,
000

15-
4: a

Pri
cepai d P 495,
000
Lessfai
rv al
ueofnetassetsacqui
red:
Cash P 60,
000
Inventory 125,
000
Propertyandequi
pment 385,
000
Liabil
i
ties (70,000) 500,000
Gainonacqui sit
ion P(5,000)

15-
5: a

Pri
cepai d P350,
000
Non-control
l
ingi
nter
est(P350,000/80%)x20% 87,
500
Total 437,
500
Lessfairval
ueofnetassetsexcludi
nggoodwi
ll 330,
000
Goodwill P107,
500

51
15-
6: a

I
nvent
ory(
P360,
000+P130,
000) P490,
000

Pl
antandequi
pment(
P500,
000+P420,
000) P920,
000

15-
7: a

Bui
l
ding P180,
000

Land P 90,
000

15-
8: a

Pri
cepaid P480,
000
NCI[(P480,
000/
80%)x20%] 120,
000
Total 600,
000
Lessfai
rval
ueofnetasset
sacqui
red 450,
000
Goodwil
l P150,
000

15-
9: d

Pri
cepai d P160,
000
Non-control
l
ingi
nter
est(P160,000/80%)x20% 40,
000
Total 200,
000
Lessfairval
ueofnetassetsacquir
ed( P300,
000–P160,
000) 140,
000
Goodwill P 60,
000

Therefor
e:
Totalasset
s(P800,000+P300,000+P60,000) P1,
160,
000
Totall
iabi
li
ti
es(P250,000+P155,000+P160,000+P5,
000) 570,
000

15-
10:b(
P900,
000x1%)

15-
11:d

Numberofsharesacqui
red(P120,
000/
P120) 1,
000
Di
videdbyout
standi
ngsharesofSoda(P125,
000/
P100) 1,
250
Contr
oll
i
ngint
erest 80%

Non-
cont
rol
l
ingi
nter
est[
(P120,
000/
80%)x20%} P30,
000

52
15-
12:a,
shoul
dbeP700,
000

Goodwil
l P250,000
FVofnetassetsacqui
redexcl
udi
nggoodwi
l
l(P700,
000–P150,
000)
550,
000
NCI (100,
000)
Pri
cepai
dbyt hePepsiCompany P700,000

15-
13:b

Pri
cepaid( P247,095+P69,955) P317,
050
NCI[(
P317, 050/85%)x15%* ) 55,
950
Total 373,
000
Lessnetasset satfai
rval
ueexcludi
nggoodwi
l
l:
Netasset satbookvalue P290,
700
I
nv entori
es 6,
630
Plantandequipment 48,
450
Patent 7,
650 353,430
Goodwill P19,
570

*P43,
605/
P290,
700=15%

15-
14:d(
P500,
000+P300,
000)

15-
15:c

Pri
cepaid P260,
000
NCI[(P260,
000/
80%)x20%] 65,
000
Total 325,
000
Lessfai
rval
ueofnetacqui
red(
P450,
000–P150,
000)
300,
000
Goodwil
l P 25,
000

15-
16:a(
Ther
etai
nedear
ningsoft
hepar
entonl
y).

15-
17:b,
shoul
dbeP615,
000

Control
li
nginter
est(Stockhol
ders’equi
tyoft
hepar
ent
)
P550,
000
Non-contr
oll
ingint
erest(perno.15-15)
65,
000
Stockhol
dersequit
y P615,
000

15-
18:a(
ref
ert
o15-
15)

15-
19:d(
P380,
000+P150,
000)

53
15-
20:c
Cashandcashequival
ent(P70,
000+P90,000) P 160,
000
I
nv ent
ory(P100,
000+P60,
000) 160,
000
Propert
yandequipment(
P500,000+P300,000) 800,
000
Goodwi l
l 25,
000
Totalasset
s P1,
145,
000

15-
21:a:
Fai
rval
uepershare:
Newacqui
sit
ion(P630,
000/
7,000shar
es) P90

Fai
rval
ueofpr
evi
ousl
yownedshar
es(
1,000*shar
esxP90) P 90,
000
(
10%)
Acquisi
ti
onofnewshar es 630,
000(70%)
Totalpr
icepaidf
or80%i nt
erest P720,000
Non-contr
oll
i
nginter
est(P720,000/
80%)x20% P180,
000
*P200,
000/P20x10% =1,
000shar
es

15-
22:c
Fairvalueofpr evi
ousl
yownedi nt
erest(10%) P 90,
000
Pri
cepai dfornewadditi
onali
nter
est(70%) 630,
000
Non-cont rol
lingi
nter
est 180,
000
Total 900,
000
Lessf airvalueofnetasset
sacquired(P910,
000–P130,
000) 780,
000
Goodwi ll P120,
000

15-
23:a Theamountr
epor
tedi
sequal
toPr
imo’
sret
ainedear
ningsof
P567,
000

15-
24:d 100%–(
P163,
000/
460,
000)=65%

15-
25:a (
340,
000-200,
000)

15-
26:b
Cash P 40,
000
Accountsrecei
vable 20,000
I
nventori
es(see15-25) 140,
000
Equi
pment( 800,
000-500,
000) 300,
000
Accountspayable (40,
000)
Fai
rvalueofnetassets P460,
000

15-
27:c

Goodwi
ll P 10,
000
Fai
rval
ueofnetasset
sacqui
red(
15-
26) 460,
000
Tot
al 470,
000
NCI (
163,
000)

54
 Pr
icepai
dbyPr
imo P307,
000

15-
28:b

Parent NCI
Total 65% 35%
Total
impli
edval
ue P470,
000 P307,000 P163,
000
Lessfai
rval
ueofnetasset
s 460,000 299,000 161,
000
Goodwil
l P 10,
000 P 8, 000 P 2,000

15-
29:b

Non-
cont
rol
l
ingi
nter
estshoul
dbev
aluedatt
hehi
gheramountbet
weent
he
f
oll
owi
ng:

Atest
imatedfai
rval
ue(P512,
000/80%)x20%
P128,
000
Atpropor
tionat
eshareofacquir
ee’snetident
if
iabl
easset
s(P670,
000x20%)
134,
000

Ther
efor
e,NCIi
smeasur
edatP134,
000.

15-
30:c

Pri
cepaid(8,000sharesxP64) P512,
000
NCI 134,
000
Total 646,
000
Lessfai
rvalueofnetasset
sacqui
redexcl
udinggoodwi
ll
:
Cash P 20,
000
I
nventory 400,
000
Equi
pment 500,
000
Curr
entliabi
l
iti
es (250,
000) 670,
000
Gainonacqui si
ti
on P(24,
000)

Pr
oof
:

Tot
al Par
ent(
80%) NCI(
20%)

Fai
rval
ueofthecompany P646,
000 P512,
000 P134,
000
Fai
rofnetasset
sexcl
udi
nggoodwi
l
l670,000 536,
000 134,
000
Gai
nonacquisit
ion P(24,
000) P(24,
000) P -

NCIdoesnotshar
eagainont heacqui
sit
ion.I
FRS3(
2008)pr
ovi
dest
hatt
hegai
n
i
sattr
ibut
edtotheacqui
reronl
y.

55
 PROBLEMS
Pr
obl
em 15-
1

a. I
nvestmentinSol oCompanystock 1,
080,
000
Cash 1,
080,
000
Torecordacquisit
ionof90%
oftheoutstandingsharesofSol
o.

Ret
ainedearni
ngs–Pol oCompany 50,
000
Cash 50,
000
Torecordacqui
sit
ion-
rel
atedcost
sdir
ectt
o
Ret
ainedearni
ngsofPoloCompany .

b. Wor
kingpaperel
i
minat
ionent
ri
es:

(
1) Commonst ock–Sol o 400,
000
Ret
ainedearnings–Solo 500,
000
I
nvestmentinSolocompanyst
ock 810,
000
Non-contr
oll
i
nginter
est
90,
000
Toel
i
minat
eSol
o’sequi
tyaccount
satdat
eofacqui
sit
ion.

(
2) I
nvent
ories 30,
000
Pl
antassets 60,
000
Goodwil
l 210,
000
Investmenti
nSolocompanyst
ock 270,
000
Non- cont
rol
l
ingi
nter
est
30,
000
Toal
l
ocat
eexcess

Det
ermi
nat
ionandAl
l
ocat
ionofExcessSchedul
e:

Total Par
ent( 80%) NCI(10%)
Companyf airvalue P1,200,
000 P1,
080, 000 P120,000*
LessBVofi nterestacquir
ed:
Commonst ock 400,000
Retai
nedear nings 500,
000
Totalequit
y 900,000 P 900, 000 P900,
000
I
nterestaquired 90% 10%
Bookvalue P 810, 000 P 90,
000
Excess P 300,000 P 270,000 P 30,
000
Adjust
ment s:

56
 Invent
ory (30,000)
Plantasset
s (60,000
Goodwi
l
l P 210,000

*(
P1,
080,
000/
90%)x10%=P120,
000

Pr
obl
em 15-
2

a. I
nvestmentinSt
rawCompany 600,
000
Cash 600,
000
Torecordacqui
sit
ionof100%ofSt
rawst
ock.

b. Pri
cepai d P600,000
Less:Bookv alueofi
nter
estacqui
red(
100%) 420,
000
Dif
fer
ence 180,000
All
ocat
ion( 100%:
Inventor
ies P(40,000)
Land (80,000)
Buildi
ng 150,
000
Equipment (20,000)
Patents (20,
000) (10,
000)
Goodwill P170,000

c. Wor
kingpaperel
i
minat
ionent
ri
es:

(
1) Commonst ock–Straw 100,
000
Ret
ainedearni
ngs–Straw 320,
000
I
nvestmenti
nStrawCompany
420,
000
Toeli
minat
eequityaccount
sofSt
rawat
dat
eofacquisi
ti
on.

(
2) Inv
entori
es 40,
000
Land 80,
000
Equipment 20,
000
Patent
s 20,
000
Goodwill 170,
000
Buil
dings 150,
000
I
nvestmenti
nSt
rawCompany
180,
000
Toal
l
ocat
eexcess.

57
Pr
obl
em 15-
3

a. I
nvestmentinSotoCompany 950,
000
Cash 950,
000
Torecordacqui
sit
ionof80%st
ockofSot
to.

Ret
ainedearni
ngs–Pedr oCompany 80,
000
Cash 80,
000
Torecordacqui
sit
ioncost
s.

b. Pri
cepaidbyt hePar entCompany P950,
000
Non-cont
rolli
nginterest(
NCI) 230,
000
Total 1,
180,
000
Less:Bookv alueofnetassets 900,
000
Excess 280,
000
All
ocati
on:
Currentassets P 50,
000
Propertyandequipment (100,
000)
Long-term debt (40,
000) (90,
000)
Goodwill P190,
000

c. Wor
kingpaperel
i
minat
ionent
ri
es:

(
1) Commonst ock–Sot to 100,
000
API
C–Sot t
o 200,
000
Ret
ainedearnings–Sotto 600,
000
I
nvestmentinSott
ost ock 720,
000
Non-contr
oll
i
nginter
est
180,
000
Toeli
minateequi
tyaccount
sofSot
toatdat
eof
acqui
sit
ion.

(
2) Proper
ty,plantandequipment 100,
000
Goodwill 190,
000
Long-t
erm debt 40,
000
Currentassets 50,
000
InvestmentinSott
ostock 230,
000

58
 Non-
cont
rol
l
ingi
nter
est
50,
000
Toal
l
ocat
eexcess

Pr
obl
em 15-
4

PacoCompanyandSubsidi
ary
Consol
idat
edStat
ementofFinanci
alPosi
ti
on
Januar
y2,2011

Currentassets P475,
000
Property
,plantandequi
pment 285,
000
Otherassets 70,
000
Totalassets P830,
000

Currentliabil
it
ies P280,
000
Mor t
gagepay able 85,
000
Commonst ock 200,
000
Additionalpaid-i
ncapit
al 65,
000
Ret
ai nedear nings(i
ncl
udinggainonacqui
sit
ionofP20,
000) 200,
000
Totalliabil
i
tiesandstockhol
ders’equi
ty P830,
000

Computationofi ncomef rom acquisi

ti
on:
Consi
derat i
ongiv en(20,
000shar esxP6) P120,
000
Lessfai
rv alueofnetasset s:
Currentassets P100,000
Proper t
yandequi pment 85,
000
Otherasset s 40,
000
Currentliabi
li
ties (
60,000)
Mor tgagepay able (
25,000) 140,
000
Gainonacqui sit
ion P(20,
000)

Pr
obl
em 15-
5

59
Theent
ryt
orecor
dtheacqui
sit
ionofst
ocki
sasf
oll
ows:

(
a) I
nvestmentinSol
ost ock 250,
000
Commonst ock,atpar 100,
000
Addi
ti
onalpaid-i
ncapit
al 150,
000
Torecordacqui
sit
ionofstock.

(
b) Ret
ainedearnings–Polo 10,
000
Addi
tionalpai
d-i
ncapi
tal 20,
000
Cash 30,
000
Torecordacquisi
ti
on-
rel
atedcost
s.

Problem 15-5,
continued
PaloCompanyandSubsi di
ary
Consol i
datedStat
ementofFinanci
alPosi
ti
on
December31, 2011
Cash P 70,
000
Receivables 120,
000
I
nv entory 170,
000
Propertyandequipment–net 340,
000
Goodwi ll 20,
000
Totalassets P720,
000

Currentliabil
it
ies P 30,
000
Long-terml i
abi l
i
ties 120,
000
Commonst ock 210,
000
Additionalpaid-incapit
al(P20,
000+P150,000–P20,
000) 150,
000
Retainedear nings,12/31(P220,000–P10,
000) 210,
000
Totalliabil
i
tiesandst ockhol
ders’equi
ty P720,
000

Computati
onofgoodwi l
l:
Consi
derati
ongiven P250,000
Lessf
airvalueofnetassets(
P290,
000–60,
000) 230,
000
Goodwil
l P20,000

Pr
obl
em 15-6
a. I
nvestmentinSeedCompany 350,
000
Cash 350,
000
Torecordacqui
sit
ionof100%ofSeedcompanyst
ock.

Det er
mi nationandAl l
ocat i
onofExcessschedul
e:
Pricepai d P350,
000
Less: Bookv al
ueofint er
estacqui
red 320,
000
Excess 30,
000
Allocati
on:
Inventory P(
20,
000)
Plantassets (
80,
000)
Long- t
erml i
abili
ti
es 40,
000 (
60,
000)
Incomef rom acquisi
tion P(
30,
000)

b. Wor
kingpaperel
i
minat
ionent
ri
es

60
 (
1) Commonst ock–Seed 100,
000
Addi
tionalpaid-i
ncapital–Seed 40,
000
Ret
ainedear nings–Seed 180,
000
InvestmentinSeedstock 320,
000
Toeli
mi nateequityaccount
sofSeedCompany

(
2) I
nvent
ory 20,
000
Pl
antasset
s 80,
000
Long-t
erm debt
40,
000
I
nvestmenti
nSeedstock 30,
000
Ret
ainedearni
ngs–Pil
l(i
ncomef
rom acqui
sit
ion) 30,
000
Toal
l
ocateexcess

Probl
em 15-6,conti
nued:
Pi
llCorporat
ionandSubsidi
ary
Consoli
datedWor ki
ngPaper
May31, 2011–Dat eofAcquisi
ti
on

Pi
l
l Seed El
i
minat
ions & Conso-
adj
ustment
Cor
por
ati
o Company Debi
t Cr
edi
t l
i
dat
ed
n
Assets
Cash 200,
000 10,
000 210,
000
Accountsrecei
vabl
e 700,
000 60,
000 760,
000
Inv
entori
es 1,
400,
000 120,
000 (
2)20,
000 1,
540,
000
Inv
estment i n Seed 350,
000 (
1)320,
000 -
company
(
2)30,
000
Pl
antasset
s 2,
850,
000 610,
000 (
2)80,
000 3,
540,
000
Tot
al 5,
500,
000 800,
000 6,
050,
000

Li
abiliti
es&St ockhol
ders’
Equity
Currentliabi
lit
ies 500,
000 80,
000 580,
000
Long-term debt 1,
000,
000 400,
000 (
2)40,
000 1,
440,
000
Commonst ock:
Pill 1,
500,
000 1,
500,
000
Seed 100,
000 (
1)100,
000
Additionalpaid-i
ncapi
tal
Pill 1,
200,
000 1,
200,
000
Seed 40,
000 (
1)40,
000
Retainedear nings
Pill 1,
300,
000 (
2)30,
000 1,
330,
000
Seed 180,
000 (
1)180,
000
Total 5,
500,
000 800,
000 420,
000 420,
000 6,
050,
000

Pr
obl
em 15-
7

61
a. AccountsRecei
vabl
e 70,
000
Cash 70,
000

b. Inv
est
menti
nSeaCompanystock 600,
000
Commonst
ock((
30,000shar
esxP20)
600,
000

Ret
ainedearni
ngs–PopCor
por
ati
on 40,
000
Commonst ock 30,
000
Cur
rentl
iabi
l
iti
es 70,
000

Probl
em 15- 7,
continued:
PopCor porati
onandSubsi di
ary
WorkingPaperf orConsoli
datedBal
anceSheet
Apri
l30, 2011–Dat eofacquisi
ti
on

Pop Sea Adj

ust
ment
s &El
i
minat
io Consol
i
-
Cor
por
ati
o Company Debi
t Cr
edi
t dat
ed
n
Assets
Cash 50,
000 80,
000 130,
000
Accountsrecei
vabl
e–net 230,
000 270,
000 (
3)70,
000 430,
000
I
nventori
es 400,
000 350,
000 (
2)90,
000 840,
000
I
nvestment in Sea 600,
000 (
1)328,
000 -
Company
(
2)272,
000
Pl
antasset
s 1,
300,
000 560,
000 (
2)220,
000 2,
080,
000
Goodwil
l (
2)50,000 50,
000
Tot
al 2,
580,
000 1,
260,
000 3,
530,
000

Li
abiliti
es& St ockhol
ders’
Equity
Currentliabi
lit
ies 380,
000 250,
000 (
3)70,
000 560,
000
Long-term debt 800,
000 600,
000 (
2)20,
000 1,
420,
000
Commonst ock
Pop 1,
070,
000 1,
070,
000
Sea 100,
000 (
1)100,
000
Additionalpaid-i
ncapit
al 360,
000 (
1)360,
000
Retainedear nings
Pop 330,
000 330,
000
Sea (
50,
000) (
1)50,
000

NCI (
1)82,
000 150,
000
(
2)68,
000

62
Tot
al 2,
580,
000 1,
260,
000 890,
000 890,
000 3,
530,
000

(
1)Toel
i
minateequi
tyaccount
sofSeaCompanyont
hedat
eofacqui
sit
ion.
(
2)Toal
l
ocatedi
ffer
ence,comput
edasf ows:
ol
l
Pri
cepaid P600,
000
NCI(P600, 000/80%)x20% 150,
000
Total 750,
000
Less:Bookv alueofnetasset
sofSea 410,
000
Excess 340,
000
All
ocati
on:
Inventori
es P(90,000)
Plantassets (
220,000)
Long-term debt 20,
000 (
290,000)
Goodwill P 50,
000
3)Toel
( i
minateint
er companyr ecei
vabl
esandpayabl
es.

Pr
obl
em 15-
8

1.Pri
cepai d P500,
000
Lessbookv alueofint
erestacqui
red
Commonst ock P100,
000
APIC 200,
000
Retainedear ni
ngs 230,
000 530,
000
Excess (30,
000)
All
ocat
ion:
Inventory P(20,
000)
Land (10,
000)
Building 50,
000
Equipment 60,
000
Bondspay able (50,
000) 30,
000

2. PCompanyandSubsi
diar
y
Consol
idat
edWorki
ngPaper
Januar
y2,2011–Dateofacqui
sit
ion

P S Adj
ust
ment
s &El
i
minat
ions Consol
i
-
Company Company Debi
t Cr
edi
t dat
ed
Debits
Cash 300,
000 50,
000 350,
000
Accountsrecei
vabl
e 200,
000 100,
000 300,
000
Inv
entory 200,
000 80,
000 (
2)20,
000 300,
000
Land 100,
000 50,
000 (
2)10,
000 160,
000
Buil
ding 600,
000 400,
000 (
2)50,000 950,
000
Equipment 800,
000 200,
000 (
2)60,000 940,
000
Inv
estmentinSCompany 500,
000 (
2)30,
000 (
1)530,
000 -

63
Tot
al 2,
700,
000 880,
000 3,
000,
000

Credi
ts
Accountspayable 150,
000 60,
000 210,
000
Bondspayable 290,
000 (
2)50,
000 240,
000
Common st ock – P 1,500,
000 1,
500,
000
Company
Common st ock – S 100,
000 (
1)100,
000
Company
APIC–SCompany 200,
000 (
1)200,
000
Retai
nedearnings–PCo. 1,
050,
000
Retai
nedearnings–SCo. 230,
000 (
1)230,
000 1,
050,
000
Total 2,
700,
000 880,
000 640,
000 640,
000 3,
000,
000

(
1)Toel
i
minateequit
yaccount
sofSCompany
.
(
2)Toal
l
ocateexcess

Pr
obl
em 15-
9

1. Pri
cepaid P500,
000
NCI(20%ofFVofSCo’ snetasset
sexcl
udi
ngGW (
P500,000x20%)100,000*
Total 600,
000
Lessbookofnetasset s 530,
000
Excess 70,
000
All
ocati
on
Inv
entory P(20,000)
Land (
10,000)
Buil
ding 50,
000
Equipment 60,
000
Bondspay abl
e (
50,000) 30,
000
Goodwill P100,
000

*NCIi smeasuredati
tspropor
ti
onat
einter
esti
nSCompany
’snetasset
sbecauset
he
assessedf
airval
ueofP80,
000issmal
ler
.

2. PCompanyandSubsidi
ary
Consol
idat
edWorki
ngPaper
Januar
y2,2011–Dateofacqui
sit
ion

P S Adj
ust
ment
s &El
i
minat
ions Consol
i
-
Company Company Debi
t Cr
edi
t dat
ed
Debit
s
Cash 300,
000 50,
000 350,
000
Account
srecei
vabl
e 200,
000 100,
000 300,
000
I
nventor
y 200,
000 80,
000 (
2)20,
000 300,
000

64
Land 100,
000 50,
000 (
2)10,
000 160,
000
Buil
ding 600,
000 400,
000 (
2)50,000 950,
000
Equipment 800,
000 200,
000 (
2)60,000 940,
000
Inv
estmentinSCompany 500,
000 (
1)424,
000 -
(
2)76,000
Goodwi
l
l (
2)100,
000 100,
000
Tot
al 2,
700,
000 880,
000 3,
100,
000

Credi
ts
Accountspayable 150,
000 60,
000 210,
000
Bondspayable 290,
000 (
2)50,
000 240,
000
Commonst ock–PCo. 1,
500,
000 1,
500,
000
Commonst ock–SCo. 100,
000 (
1)100,
000
APIC–SCo. 200,
000 (
1)200,
000
Retai
nedearnings–PCo. 1,
050,
000 1,
050,
000
Retai
nedearnings–SCo. 230,
000 (
1)230,
000

NCI (
2) 6,000 (
1)106,
000 100,000
Tot
al 2,
700,
000 880,
000 716,
000 716,
000 3,
100,
000
(
1)Toel
i
minateequit
yaccount
sofSCompany
(
2)Toal
l
ocateexcess

Pr
obl
em 15-
10

1. Pri
cepai d P542,000
Lessbookv al
ueofinter
estacqui
red(
100%)
: 670,
000
Excess (128,
000)
All
ocat
ion
Invent
ory P(
10,000)
Land (
40,000)
Equipment 20,
000
Long-t
erminvestmenti
nMS (
15,000) (45, 000)
Gainonacquisit
ion P(173,
000)

2. PCompanyandSubsidi
ary
Consol
idat
edWorki
ngPaper
Januar
y2,2011–Dateofacqui
sit
ion

P S Adj
ust
ment
s &El
i
minat
ions Consol
i
-
Company Company Debi
t Cr
edi
t dat
ed
Assets
Cash 100,
000 100,
000 200,
000
Accountsrecei
vabl
e 200,
000 150,
000 350,
000
Inv
entory 150,
000 130,
000 (
2)10,
000 290,
000
Land 50,000 80,000 (
2)40,
000 170,
000
Equipment 300,
000 200,
000 (
2)20,000 480,
000
Inv
estmentinSCompany 542,
000 (
2)128,
000 (
1)670,
000 -

65
Long-
ter
m i
nvest
ment i
n 100,000 125,
000 (
2)15,
000 240,
000
MS
Total 1,
442,
000 785,
000 1,
730,
000

Li
abil
iti
es&Stockhol
der
s’
Equit
y
Accountspayable 175,
000 115,
000 290,
000
CommonSt ock–PCo. 400,
000 400,
000
CommonSt ock–SCo. 200,
000 (
1)200,
000
APIC–PCo. 200,
000 200,
000
Retai
nedearnings–PCo. 667,
000 (
2)173,
000 840,
000
Retai
nedearnings–SCo. 470,
000 (
1)470,
000
Total 1,
442,
000 785,
000 863,
000 863,
000 1,
730,
000

(
1)Toel
i
minateequit
yaccount
sofSCompany
.
(
2)Toal
l
ocateexcess

Pr
obl
em 15-
11

1. I
nvest
menti
nSunCompany 1,
900,
000
Cash 1,
900,
000

2. Pri
cepaid P1,
900,
000
Lessbookv alueofint
erestacquir
ed:
Commonst ock P 600,
000
Retai
nedear ni
ngs 840,
000 1,
440,
000
Excess 460,
000
All
ocat
ion:
Land (
100,
000)
Buil
ding (
200,
000)
Bondpay able(bonddiscount
) (40,
000)
Deferredtaxes (20,
000) (360,
000)
Goodwill P 100,
000

3. Land 100,
000
Buil
ding 200,
000
Bonddi scount 40,
000
Goodwi ll 100,
000
Deferredtaxes 20,
000
Retai
nedear nings 840,
000
Addit
ionalpai
dincapi
tal 1,
300,
000

4. Commonstock 600,
000
Addi
ti
onal
paidi
ncapi
tal 1,
300,
000

66
 I
nvest
menti
nSunCompany
1,
900,
000

Pr
obl
em 15-
12

Suppor
ti
ngcomput
ati
ons:

Fai
rval
ueofexisti
ngXCompanyequit
y(200shar
esP50) P10,
000
PCompanyi nt
eresti
nXCompany[300/(
300+200)] 60%
Acqui
sit
ionpri
ce P 6,
000

Ent
ryt
orecor
dthei
ssuanceof300shar
es–BooksofXCompany(
legal
par
ent
)

I
nvest
menti
nPCompany 6,
000
Commonst
ock(300shar
esxP2) 600
API
C 5,
400

Pr
obl
em 15-
12,
cont
inued:
Fai
rval
ueanal
ysi
s: I
mpl
i
edFV Par
ent(
60%) NCI(
40%)

Companyfai
rval
ue P10,
000 P6,
000 P4,
000
Fai
rval
ueofnetasset
sexcl
udi
nggoodwi
l
l 6, 000 3,
600 2,
400
Goodwi
ll P 4,
000 P2,
400 P1,
600

1. Di
str
ibut
ionandal
l
ocat
ionofexcessschedul
e:

I
mpl
i
edFV Par
ent(
60%) NCI(
40%)

Fai
rv al
ueofsubsi diary P10,
000 P6,
000 P4,
000
Lessbookv al
ueofi nterestacqui
red:
Commonst ockP2par 4,
000
APIC 1,
600
Retai
nedear nings 2,
000
Total 4,
000 P4,
000 P4,
000
I
nterestacquired 60% 40%
Bookv alue P2,500 P1,600
Excess 6,000 P3,
600 P2,
400
All
ocatedt oNon-cur r
entassets (2,
000)
Goodwi ll P 4,
000

2. XCompanyandSubsi
diar
yPCompany
Consol
i
dat
edStat
ementofFi
nanci
alPosi
ti
on

67
 December31,
2011

Asset
s Li
abi
l
iti
esandEqui
ty

Curr
entassets P 4,
000 Non-
currentl
iabil
it
ies P 6,
000
Non-cur
rentasset
s 16,
000 Commonst ock( 300shar
esxP2) 600
Goodwil
l 4,
000 API
C 1,400*
Ret
ainedearnings
6,
000*
*
NCI 10,
000*
**
Tot
alasset
s P24,
000 Tot
all
i
abi
l
iti
esandequi
ty
P24,
000

* Tot
alpai
dincapi
tal
ofPCompany(P200+P1800) P2,
000
Newsharesi
ssued(300shar
esxP2) 600
API
C P1,
400

*
* Ret
ainedear
ningsoft
hel
egal
subsi
diar
y–PCompany

*
** Ther
emai
ningshar
esoft
heor
igi
nal
CCompanyequi
ty.

68