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CHAPTER 18

MULTIPLE CHOICE
18-1: a Equipment – at original cost Accumulated depreciation: Time of sale Current depreciation based on Original cost (P500,000/10 years 18-2: b Net income – Sol Unrealized gain on sale of computer, Dec. 31 Adjusted net income Minority interest proportionate share Minority interest in net income of subsidiary (MINIS) 18-3: b Net income from own operations – Prime Unrealized gain – Downstream Realized net income – Prime Second Company net income Consolidated net income 18-4: c Net income – Saw Unrealized loss-Upstream Realized loss ((P12,000 / 5) x 6/12 Adjusted net income – Saw P100,000 12,000 ( 1,200) P110,800 2005 P200,000 (30,000) P170,000 100,000 P270,000 2006 P250,000 __P250,000 150,000 P400,000 P100,000 ( 30,000) P 70,000 30% P 21,000 P250,000 50,000 P300,000 P500,000

Minority interest in net income of subsidiary (P110,800 x 25%) P 27,700 18-5: c Equipment – at original cost Accumulated depreciation: Time of sale Current depreciation (P900,000/10) P360,000 90,000 P1,000,000

P 450,000

100

000) P224. Dec.000 x 20%) Attributable to parent P200. Dec. Dec.000.000 x 20%) Attributable to parent P300. 2008 – Sy Increase in earnings – 2008 (P65. 2008 – Sy P1. 31 – DS Net income from own operation – Po Net income of So Consolidated net income.000) P314.000 – P30.000 18-8: c Net income – Po Unrealized gain.000) P 52.500 P252.600 P230.000 (36. 31 (P50.035.000/5) ( 3.000 P120. Jan.100 101 . 31.000 (48.500 (28.000) Consolidated net income. 2008 MINIS (P180.000 18-9: b Stockholders’ equity.000 / 10) x 6/12 Realized net income – Pink Soda’s adjusted net loss: Net loss P(40. July 1.500 5. Dec. 31. 12/31 (P15.000 (30.000 35.000) Stockholders’ equity.000 x 20%)P 207. 1.000 90. 31. 2008 MI in net loss of subsidiary (P28.000) 270.000) 2.000 Realized loss.000 18-10: b Consolidated net income attributable to parent: Net income – Pink Unrealized gain. Dec.Downstream Realized gain.000 P1.000) Unrealized loss.000 18-7: a Original cost Amount debited to Truck account Selling price of the truck – Amount paid P100.000 / 40%) Add back: Unrealized gain – Upstream Net income of Susie – 2008 P 30. 1/1 – Upstream 15.000 180.000 Minority interest in net assets of subsidiary (P1.18-6: a Adjusted net income – Susie (P12.000 ( 50.000 P350.035.

000 P40.000 ( 12.960 1.Upstream (P60. Dec. 2008 P1.000 Divided by 20% Net assets. 31.000 240. Dec.000 x 80%) Unrealized profit in ending inventory – Downstream (P24. Dec. Jan.000 – 9.960 MI share of unrealized profit in ending Inventory – Upstream 1. 2008 Parent’s proportionate share Book value of interest acquired Add: difference Purchase price (acquisition cost) Add: Investment income Peter’s share of Steve net income (P240. 2008 Less: net income – steve MINIS P36.600) Investment in Steve Company. Dec.000 x 25/125%) x 80% Unrealized gain on sale of equipment – Upstream (P48.000 P 192.000 / 20%) Investment in Steve Company stock – Equity method Acquisition cost: Net assets.760) ( 38.000 x 20%) – (P12.600 P200.000 20. 31.31.000 / 80%) Decrease in earnings: Net loss Dividends paid Net assets. Jan. Dec.000 x 80% P 608.840 102 .000) P1. 31.000 P 628.440 MI share of unrealized gain on sale of Equipment – Upstream 9.000 / 5) Minority interest before adjustment Net assets – Steve.Minority interest in net assets of subsidiary Net assets.000 Minority interest in net assets of subsidiary (P1.000 x 20%/120%) x 100% Unrealized profit in beginning inventory – Upstream (P36. 2008 (P200. 1.550.480. 2008 Add: MI share of unrealized profit in ending inventory -Upstream (P36.000 30.600 MINIS per book P48. Dec.000 ( 70.000. 2008 P188.440 9.400) P 771.600 18-11: a Net assets. 31 (Upstream) Adjusted net assets.000 P1.000 P 760. 2008 Minority interest. 2008 (P1.000 x 20%) x 20% MI share of unrealized gain on sale of equipment. 2008 Unrealized loss.000. Dec. Dec. 31. 31.000) ( 5.000 P1. 31.468.000) P1.000 x 20%)P 293.240.000 ( 4.468. 1.

000 ( 9.400 2008 P120.000 P455.000/3) x ¼ 2008 (P9.500 (22.000 / 5) x 75% ( 1.000 Unrealized gain on sale of land – Downstream (15.000 – P200.000 x 75%) 15. 2008 (P50.000/3) Adjusted net income Consolidated net income MINIS Attributable to parent 18-14: d Investment in Sili Company stock – Equity method Acquisition cost Investment income net of dividends – 2005 to 2007: Increase in earnings (P500.000) x 75% Investment income.000/5)x ½ Consolidated net income.000) Unrealized loss on sale of building – Downstream 10.000) Dividends received: 2007: (P10.000) 5.500 Realized loss (P10.000 Realized loss on sale of building (P10.500) P791. 31. Dec.000 38.500) Investment income. Dec.000 P 75.500 50.000 225.000 (50. 31.000 x 75%) 45. 2008 – Upstream Realized gain.000 P100.000 P 78. July 1.18-12: a Net income from own operations – Pipe Pipe’s share of Smoker’s adjusted net income: Net income Unrealized gain.000 55. Dec.600) P182.000 / 5) (2. 2008 P500. 31. 2008 18-13: d Net income from operations – Parent Parent’s share of adjusted net income of Sub: Net income Unrealized gain – Upstream Realized gain: 2007 (P9.500 103 . Dec.400 P400.000 2007 P100. 31.000 Investment in Sili Company stock.000 P 60.000 x 75%) 52.750 P151. 2007: Share of Sili’s net income (P60.000) 750 P 51.500 2008: (P20.000 3.350) P141. 2008: Share of Sili’s net income (P70.000 (15. Dec.000 x 75%) 7.000 P198.750 (10. 31.

000 Realized loss on sale of warehouse (P20.18-15: a Investment in Saw Company stock.000) Dividends received: 2007: ( P20.250 104 .000 180.000 x 90%) P 18.000/2) x 90% (9.000) P885.000 Investment in Saw Company stock account balance 12/31/08 P550.000) x 90% Investment income – 2007 (see above) Investment income – 2008: Power’s share of Saw’s net income (P120.000 2008: ( P30.000 101. 31. 2008 Acquisition cost Investment income – 2002 to 2006: Increase in earnings (P500.000 – P300. Dec.000 (45.000 x 90%) P108.000 x 90%) 27.250 99.

000 180.000 490.750) P266.000 + P140. Dec.000 785.000 + P130.000 330.000 – P5.000 x 20%) Minority Interest in Net Assets of Subsidiary: Stockholders’ equity.000) P170. S Company net income Consolidated net income b.000 Consolidated net income Attributable to minority interest (P190. 31 – Downstream Adjusted net income – P Co.200 (P800 x 4) Problem 18-2 a.000 820. 2008 – S Company Increase in earnings – 2008 (P180. Consolidated Net Income Net income from own operations – P Company Unrealized gain on sale of equipment.560 (P3. Dec.000 P350.PROBLEMS Problem 18-1 Computation of the missing amounts in the working paper eliminations for P Corporation and S Company: (1) P640 (P3. 1.000 P 900.000 P1.020.000 Other expenses (P80.000 – P60.600 x 80%) (6) P3.000 P 36.000 20. 2008 Sales (P500.000) 220.000 Problem 18-3 Pony Corporation and Subsidiary Consolidated Income Statement Year Ended December 31.000) P 75.000 + P5.600 (P800 x 2) (4) P320 (P1. 2008 – S Company Minority interest Minority interest in net assets of subsidiary P200.000) Gain on sale of machinery (schedule 1) Total revenue Cost of sales P200.000 120.000 + P300.000 +P30. Minority interest in net income of subsidiary (P180.280 (P1.200 x 20%) (2) P2.000 x 20% P 204. Jan.000 (28.000) x 25% Attributable to parent P800.600 x 20%) (5) P1. c.000) Stockholders’ equity.000 (30.200 x 80%) (3) P1.000) +10. 31.250 105 .000 295.000) Gross profit Expenses: Depreciation (P50.

2008 – S Company Increase in adjusted earnings – 2008: Net earnings (P150. 31.500 424.500 P252.000) (28. Dec.000 P20.000 / 10) x 6/12 Adjusted net income – BJ Net income (loss) of DK: Net income (loss) – DK Loss on sale of truck .500 x 20% P114.000 ÷ 5) x3 Gain on sale Unrealized gain (P25.900 Problem 18-5 a. 12/31/08 (P30. 2008 Book value (P65.500 P(40.2008 Net income from own operations – BJ Gain on sale of machine.Schedule 1: Selling price – Dec.000 P300.000 ( 3.000 – P4.000 ( 30.000/5) x 9/12 Consolidated net income MINIS (P124. Jan.000 10.900) P399. 1.500) Stockholders’ equity.000 (25.Downstream Realized gain. 31 (P15.600 b.000) x 20% P ( 5. Dec.500 P874.000 P150.600) b.000) P224.000) P ( 28.000) 15.000 10.500 124. 2008 Minority interest MINAS P36.500 P (40. 31 (P50.000 26.000 P100.500) 74. Dec.Upstream Realized loss.000 (50.000 / 5) Consolidated net income Minority Interest in Net Income of Subsidiary Net loss from own operations – DK Upstream loss on sale of truck Realized loss on sale of truck Adjusted net loss Minority interest MI in net loss of subsidiary P300.000 – P15. Consolidated Net Income .500 x 20%) Attributable to parent Minority Interest in Net Assets of Subsidiary Stockholders’ equity . July 1 . P800. 28.000) 4. Jan.500 (24.000) 15.Upstream Realized gain. 4/1/08 .000) Total gain Problem 18-4 a. 106 .000 – P50.000) 2. 1 .000) Unrealized gain – 12/31 (P30. Consolidated Net Income Net income from own operations – P Company Adjusted net income of S Company: Net income – S Unrealized gain.000 ( 3.

000 244.000 104.480. 2008 Sales Cost of goods sold Gross profit Expenses (P200.000 115.000 Consolidated 121.000 (3) 15.000 120.240.000 850.000 107 .000 872.000 709. 31. 1.000 150.000 347. Problem 18-7 a.000 (1) 50.000 200.500.c.000 Adjustments & Eliminations P1.500 Debit (2) 10.000 1.000 (3) 9.000) P1.000 40.000 (2) 4. 2006 (P1.000 (70.000 (2) 6. Leo Company and Subsidiary Consolidated Balance Sheet Working Paper December 31.000 ) Consolidated net income Attributable to minority interest (P150.500 P 520.000 (1)200.000 x 25%) Attributable to parent Adjustment for expenses (depreciation) = P40.400 Problem 18-6 Texas Company and Subsidiary Consolidated Income Statement Year Ended December 31.000 Taurus Corporation 20.000 90.000 x 20% P 298. Jan.000 1.000 135.000 90.000 90.000 290. 2006 Unrealized loss – Upstream (P15.000 (3) 24.000 37.000 450.000 85.000 450.000 300.000 400.000 250.000 100.000 100.000 + P100.000 347.000 80. Minority Interest in Net Assets of Subsidiary Net assets.000 650.000 Credit Cash and receivables Inventory Land Building and equipment Investment in stock –Taurus Total debits Accumulated depreciation Accounts payable Notes payable Common stock Retained earnings MI in net assets in Subsidiary Total (1)150.000 / 5 years.000 P1.200. 2007 Leo Company 101.000 872.000 12.492.000 P 558.000 – P8.000 141.200.550.000 200.000 – P3.000) Adjusted net assets Minority interest MINAS P1.000 + P30.000 292.000 50. Dec.000 (1)100.000 25.000) Net assets.000 / 80%) Increase in earnings (loss) -2006 (P40.

(1) To eliminate equity accounts of subsidiary (2) To intercompany gain on sale of land. 10.000 Problem 18-8 a. 31.000 347. Working Paper Elimination Entries – Dec.000 Minority interest in net assets of subsidiary 2.000 108 .000 (4) Retained earnings – Jan. b.000 P709.000 120.000 465.000 5. (3) To eliminate intercompany gain on sale of equipment debited to Investment account and restore equipment to its original book value.000 1.000 250.000 100.000 Investment in Jupiter stock Minority interest in net assets of subsidiary To eliminate equity accounts of Jupiter as of the date of acquisition Goodwill Investment in Jupiter Stock To allocate difference to goodwill 40. 2008 (1) Dividend income Minority interest in net assets of subsidiary Dividends declared – Jupiter To eliminate intercompany dividends 4.000 290.000 120. Leo Company and Subsidiary Consolidated Balance Sheet December 31.000 P956.000 P115.000 P956.000 244. 1 8. 2008 Cash and receivables Inventory Land Building and equipment Less: Accumulated depreciation Total assets Accounts payable Notes payable Common stock stock Retained earnings Minority interest in net assets of subsidiary Total liabilities and equity P121.000 (3) 40.000 Land To eliminate unrealized gain on sale of land – Upstream.000 104.000 30.000 Retained earnings – Jupiter 50.000 (2) Common stock – Jupiter 100.

000 109 .000 Accounts receivable To eliminate intercompany payables and receivables.000 (6) (7) Accounts payable 7.000) x 20% 7.000 2. Minority interest in net income of subsidiary 6.000 25.000 – 10.000 (8) 6.000 2.(5) Gain on sale of equipment Building and equipment Accumulated depreciation To eliminate gain on sale of equipment Accumulated depreciation Depreciation To adjust excess depreciation 20.000 Minority interest in net assets of subsidiary (P40.000 5.

000 33. Jan.336.000 355.000 113.000 60.000 60.000 102.000 45.000 Adjustments & Eliminations Debit Credit Consolidated 360.000 Income Statement Sales Gain on sale of equipment Dividend income Total revenues Cost of goods sold Depreciation Other expenses Total cost and expenses Net/consolidated income MI in net income of subsidiary Net income carried forward Retained Earnings Statement Retained earnings.000 355.1 Net income from above Total Dividends declared Retained earnings.000 73.000 (6.000 20.000 15.000 40.000 35.000 245.000 (5) 20.000 96.000 160.000 (2) 50.000 294.000 84.000 (1) 4.000 205.000 145.000 (2) 30.000 (7) 7.113.000 150.000 (2)120.000 300.000 (6) 2.000 50.000 (6) 2.000 4.000 150.000 40.000 (4) 2.000 273.000 245.000 350.000 258.000 141.000 80.000 407.000 348. 31 Carried forward Balance Sheet Cash and receivables Inventory Land Buildings and equipment Investment in Jupiter stock Goodwill Total Accumulated depreciation Accounts payable Bonds payable Common stock Retained earnings from above MI in net assets of subsidiary Total 240.000 120.000 1.000 360.000 1.000 84.000 20.000 5.000 200.000 (7) 7.000 100.000 80.000 30.000 1.000 80.336.000 437.000 38.000 140.000 (1) 1.000 40.113. Vincent Company and Subsidiary Consolidation Working Paper December 31.000 30.000 500.000 180.000 348.000 (8) 6.000 (5) 25.000 655.000 (1) 5.000 105. Dec.000 (3) 40.b.000 (8) 6.000) 96.000 300.000 378.000 264.000 140.000 84.000 (5) 5.000 (4) 10.000 250.000 140.000 40.000 20.000 25.000 15.000 .000 90.000 407.000 341.000 (2)100.000 (3) 40. 2008 Vincent Company Jupiter Company 120. 110 .000 1.000 (4) 8.000 5.000 260.000 200.

000 P 73.000 111 .000) P 407.000 58. Jan.000 P300.000 382.000 P 141.000 ( 30.000 20.000 40. Consolidated Financial Statements Vincent Company and Subsidiary Consolidated Balance Sheet December 31.000 250.000 P 323.000 P1.000 P 96.000 P 38. 2008 Assets Cash and receivables Inventory Land Buildings and equipment Less: Accumulated depreciation Goodwill Total assets Liabilities and Stockholders’ equity Liabilities Accounts payable Bonds payable Total liabilities Stockholders’ Equity Common stock Retained earnings Minority interest in net assets of subsidiary Total liabilities and stockholders’ equity Vincent Company and Subsidiary Consolidated Income Statement Year Ended December 31.000 P1.c.000 102.000 350.063.000 341.000 96. 1 – Vincent Retained earnings.000 6.000 273. 2008 Retained earnings.000 200.000 33.000 150.000 160. 2008 Sales Cost of goods sold Gross profit Expenses: Depreciation Other expenses Consolidated net income Attributable to minority interest Attributable to parent Vincent Company and Subsidiary Consolidated Retained Earnings Year Ended December 31.000 P655. 1 – Jupiter Total Consolidated net income attributable to parent Dividends declared – Vincent Consolidated retained earnings P 294.000 P 360.000 47.063. Jan.000 407.000 740.

2006 – Upstream Adjusted net income Minority interest Minority interest in net income of subsidiary 112 .000 (P126.000 [P345.200 (l) Net income – Shadow.000) (3.000 P250. 2008 Less: Share of unrealized profit on sale of equipment: Gain record [P45.000) .P101.600 P376.000) x 60% Adjusted Investment account balance.000 (P593.000 0 P510.000 – P3.000 – P20.000 – P220.400 (g) (h) (i) (j) (k) 3.000 + (P60.000 + P150.000 30.Problem 18-9 (a) (b) © (d) (e) (f) P100.000 P141.000 P9.000 + P90.000) + [(P25. 31.000 + P85.000 x 60% P105.000 – P30.600) P 70.000 3.000 = P180.400 P 30. 2008 (P250.000) P100.000] 0 Purchase price. 31. 2008 P7.000 – (P60.000 + P80.000 – P45. Jan.000 x 40% P 13.000 / 3) Unrealized Phantoms’ interest Consolidated retained earnings P380. 1.000 / 3) x 2 years] Retained earnings.000 – P35.000 3.000/5) x 4 ] Less [(P45.000) x 60% Undistributed income for 2008 (P30. Dec.000 (P70.000 6.000) Realized gain on sale of building c Dec.000)] P278. 31.000) – P153.000 (7.000 + [(P60.000 – P343.000 P 33.000 P6.000 (the common stock of Phantom only) P140.000) x 60% Total Adjustments: Unrealized gain on sale of land – Downstream (g) Unrealized gain on sale of equipment – Upstream (P9.000 x 3/5)] Realized in 2008 (P9. 2008 Undistributed earnings from 1/1/05 to 1/1/08: (P80. Dec.

000 – P30.000) x 30% Unrealized profit as of Dec. 2008 P 12. 31.000) ( 10. 2008 P 40.000 / 5) x 2 years (20.000 P 162.000 (160.000 Unrealized profit from intercompany sale of inventory – Downstream.000) P 90.000) P 507.000) Unrealized gain as of Jan.000 / 12) (2) P 372.Problem 18-10 Supporting computations (1) Allocation schedule (purchase price) Less: Book value of interest acquired (P350.000 205. 2008 P 30. 12/31/08 Remaining inventory as of Dec. 31.000 Realized gain (P50.000 Gross profit rate on sales – 2008 (P48.000 ( 72. 1/1/08: Remaining inventory as of Dec. 1. 31. 2006: Unrealized gain at date of sale (P80. 1.000) P 240. 1.000 b.000 P 10. 2007 P 50.000 Gross profit rate on sales – 2007 (P30.000 Unrealized gain on intercompany sale of building – Upstream.000 Realized profit from intercompany sale of inventory – Downstream. Jan. 2008 P 10.000 / 5 years) Consolidated P 460.000) P 50. 113 .000 x 60%) Difference Allocated to patents (P120.000 x 60%) Goodwill Amortization of patents (P120.000 / P150.000 70.000) 12. 1 above) Excess depreciation (P50.000 P 170. Cost of goods Sold Cost of goods sold – Apex Cost of goods sold – Small Intercompany sale of inventory – 2008 Realized profit on beginning inventory Unrealized profit on ending inventory Consolidated Operating Expenses Operating expenses – Apex Operating expenses – Small Amortization (No.000 (10.000 (3) (4) Consolidated balances – 2008 a.000 / P160.000) x 20% Realized profit as of Jan.000 210.000 10.

000 10.000) 30. 2006 Realized gain. 2007 – Downstream (10.000 + P420.000 x 6) (60. Jan.000 x 7) Consolidated patents (net) Consolidated Common Stock = P300.000 202. 2008 Consolidated inventory Consolidated Building Buildings – Apex Buildings – Small Unrealized gain. 2008 Minority interest Minority interest in net assets of subsidiary P 520.000 Consolidated Inventory Inventory – Apex Inventory – Small Unrealized profit in inventory – Dec.000 x 60%) (18.2008 – Upstream Adjusted net assets.000 x 40% P 200.000 (20. Jan. 2002 – 2008 (P10.000 P 233. 1. 31. 2006 – 2008 (P10. 31. 1/1/08 . Dec. Dec.000 ( 12. Consolidated Retained Earnings. Dec.000 x 40% ( 14.000 d. 1.000 P 490.000 229. 2008 – Apes P 690. g.000) P 500.000) Unrealized gain on sale of building. 114 .c.000) P 70.Upstream (P30. Jan.000 (50. 1.000 P 308. 2008 Retained earnings.000 e.000 120.000) Consolidated retained earnings. Jan.000 (Apex common stock) Minority Interest in Net Assets of Subsidiary Stockholders’ equity – Small.000 (507. h.000 P35. 31. i.000 ( 70. 1. 2008 P 602.000) P25.000 P 20. Consolidated Net Income Sales (after elimination of intercompany sales) Cost of goods sold (a) Operating expenses (b) Minority interest in net income of subsidiary: Net income – Small Realized gain on sale of building – Upstream Adjusted net income Minority interest Attributable to parent P 840.000) Unrealized gain on sale of building. f.000) (240.000 x 3 ) Consolidated buildings Consolidated Patents Patents – Small Allocation Amortization. 2008 (P100.000) Unrealized profit on inventory. 31.000) P 79.000) P 450.000 Amortization of patents – 2002 to 2007 (P10.

000 (2) 84.000 (4) 100.000 Minority interest in net assets of subsidiary 4. Goodwill Investment in Duke To allocate difference Impairment loss Goodwill To reduce goodwill for impairment.000 53.000 (3) Common stock – Duke 320.000 6.Problem 18-11 a. Working Paper Elimination Entries (1) Retained earnings – Jan.000 200. 1/1 – Duke 620.000 48.000 60.000 Inventory To eliminate unrealized profit in ending inventory – Upstream Investment in Duke Land To eliminate gain on sale of land – Downstream Liabilities Accounts receivable To eliminate intercompany debt.000 5. 2005 (P10.000 10.000 618.000 (5) (6) (7) Investment in Duke 6.200 (10) (11) 115 .000 APIC – Duke 90.000 x 60%) Income from Duke Company Minority interest in net assets of subsidiary Dividends declared – Duke Investment in Duke To eliminate intercompany dividends.000 Retained earnings.000 40.000 24.000 Investment in Duke (60%) Minority interest in net assets of subsidiary (40%) To eliminate equity accounts of Duke as of beginning of year. 1 Investment in Duke To adjust Investment account for unrealized profit in inventory on Dec.000 (8) 12. 6.000 5.000 40. Sales Cost of goods sold To eliminated intercompany sales 100. Minority interest in net income of subsidiary 40.000 412.000 200. 31.000 (9) 40.000 Cost of goods sold To eliminate realized profit in beginning inventory – Upstream Cost of goods sold 12.

000) Increase in earnings – 2008 (P140.000 292.000 P144.000 x 40% P 53.000 + 10.000) Adjusted net assets.000 + 620.000 – P84.000 180.000 178.000 – P60.000 Unrealized profit in ending inventory (12.000) Unrealized gain on sale of land Adjusted net income.000 368.000 (10.000) P80.000 P1. Consolidated sales: Combined sales December 31 2008 P800.000 .000 116 . .000 10.000) P 190.000 442. 1/1/08 – Duke (P320.000 x 60%) Consolidated net income Problem 18 – 12 Pluto Corporation and Subsidiary Star Corporation Comparative Consolidated Income Statement Years Ended December 31. .000 10.000 + P90.200 b.000 154.000 Goodwill impairment loss ( 5. Sales Cost of goods sold Gross profit Operation expenses Consolidated net income Minority interest in net income of subsidiary Attributable to equity holders of Pluto Supporting computations: . .000 x 40% P 441.103.000) P133.000 – P5.000 P 323. . . .000 2007 P660.000) Realized profit in beginning inventory 10.200 P 200.Baron Adjusted net income of Duke (P133.000 c.000 ( 12.000 2007 P700.000 P170. Minority Interest in Net Income of Subsidiary Net income – Duke Realized profit in beginning inventory – Upstream Unrealized profit in ending inventory – Upstream Impairment loss Adjusted net income – Duke Minority interest MINIS Minority Interest in Net Assets of Subsidiary Stockholders’ equity. 2008 P850.Minority interest in net assets of subsidiary (P140.000 d. .000 133. 73.000 – P12.200 P1.000 10.000) ( 5. .030.000 358.000 138. 2007 and 2008 . Consolidated Net Income Net income from own operations – Baron (P284.000) x 40% 53. 12/31/08 Minority interest MINAS P140. .

000) P138.000 P50.000 P180.000 .000 .000 20% P10. . . .000 (2.000 (40.000) (10.000 . .000) P178.000) 10.000 (50. .000 P140.Less: intercompany sales Consolidated sales Consolidated cost of goods sold: Combined costs of good sold Intercompany sales Unrealized profit in ending inventory Unrealized profit in beginning inventory Consolidated cost of goods sold Consolidated operating expenses Combined operating expenses Realized gain on sale of equipment (P10.000) P660.000 P400.000 P368.000) P442. 117 . inventory sales Realized net income Minority interest Minority interest in net income of subsidiary (50.000) 8.000 (2.000 P65. P490.000) P50.000 20% P10.000 (5.2) Consolidated operating expenses Minority interest in net income of subsidiary Star Company’s reported net income Gain on upstream sale of land Unrealized gain in upstream. P50. .000) P800.000/.000 (40.000 (8.

118 .