Advanced Financial Accounting & Reporting Comoloted rencto solemenls Subsequent fate of Acquson Inlercompany Soles ol Fixed Assols Page 3 5, The Non-controtiing interest in Net income for 2015: «@. £30,000 . P24,900 bb, P25,500 . P24,300 6. The Prot attributable to equily holders of parent (Parent's Interest/Controlling Interest in Profit) for 2015) «@. P356,500 ©. P363.075 bb, P362,200 . P386,500 7. Ihe Consolidaled/Group Net Income for 2015: 0. P356,500 €. P363.075, bb. P362,200 d. P387.375 8 The non-conttoling interest on December 31. 2015: «a. P208.700 .P 174.900 b. P189,300 .P173,100 9. The non-contioling interes! {in net assets) on December 31, 2016, assuming Ihat Ihe nel income and dividends of subsidiary amounted to P200,000 and P70,000, respectively a. 208,000 ‘©. P235,300 b. P209,200 d, 222,400 10. Using the some information in Nos. 7 and 8, compute the stockholders’ equity of subsidiary on December 3! 2015 2016 2016 @.P1,000,000 1,000,000 .P1,069,000P1.196,000 'b.P1,000.000 1,130,000 71,043,500 P1,176,500 11. The controling (parent's) interest ~ retained eamings ot the consolidated retained earings on December 31, 2015: a. 1,040,000 ¢.P1,123,075 bb. P1,063,075 P1,140,675 12, The consolidated stockholders’ equily on December 31, 2015: a. P2,040,000 , P2,398.375 b. P2349,375 .P2,375,975 Il Muttiple Choices 1. Scroll Inc., a wholly-owned subsidiary of Pin, Inc. began operations on January 1, 2019. The following information is from the condensed 2019 income statements of Pin and Scroll: {270,000} (350,000 | | Gross protit [Depreciation — | Other expenses Equipment purchased by Scroll from Pirn for P36,000 on January 1. 2019. is depreciated using the: slraight-line method over four years. What amount should be reported as depreciation expense ity Pirn's consolidated income statements? 8 ‘A. 50,000 .P44,000 B. 47,000 BD. P41,000 2. Upper Company holds 60 percent of Lower Company's voting shares. During the preparation of ‘consolidated financial statements for 2019, the following eliminating enty was made: Retained earnings, JANUaTY Fa... sesse eve 10,000 Lond . Which of the following statements is comect? ‘A. Upper Company purchased land from Lower Company during 2018. 8B. Upper Company purchased land from Lower Company before January 1, 2019. C. Lower Company purchased land from Upper Company during 2019. D. Lower Company purchased land from Upper Company Before January 1, 2019. AFAR-11 10,000Advanced Financial Accounting & Reporting Consolidated Financial statements - Subsequent to Date of Acquisition: Intercompany Sales of Fixed Assets Page 4 Corporation's voting shares. Sotto has developed @ new type of production equipment thai appears to be quite marketable. I! spent P40,000 in developing the equipment: however. Middke agreed to purchase the production rights for the machine for P100,000. I the interccinpany sale occurred on January 1, 2019, and the production fights are expected lo have value for five years, af whal amount! should the rights be reported in the consolidated balance sheet for December 31, 20192 APO C.F 80,000 B. 32,000 ©. P 100,000 ‘Questions 4 through 7 ore based on the following information: ‘On January 1, 2019. Gold Company purchased a computer with an expected economic file of five years, On January 1, 2021, Goid sold the computer to TLK Corporation and recorded the following entry: 3. Middle Company holds 60 percent of Bott Cash. . 7 a senses 39,000 Accumulated depreciation. soon: 16,000) ‘Computer equipment....... ETO 40,000 Gain on sale of equipment 15.000 TLK Corporation holds 60 percent of Gold's voting shares, Gold reported net income of P45,000, and TLK reported income from its own operations of P85,006 for 2014, There is no change in the estimated life of the equipment as a result of the inter-corporate transfer. 4, In the preparation of the 2021 con-olidaied income statement, depreciation expense will be Answer: B A. Debited for P5,000 in etiminalag cities B. Credited for PS,000 in the eliminating entries C. Debited for P13,000 in the eliminating enties D. Credited for P13,000 in the eliminating enties 5. In the preparation of the 2021 consolidated balance shee!, he computer equipment will be: Answer: A A. Debited for P1.000 C. Credited for P24,000 8. Debiled for P15.000 D, Nebited for P40,000 6. The income assigned 19 the nen-controling interest in Ihe 2021 consolidated income statement will be: Answer: B ‘A. 12,000 C.P18,000 B. P14,000 D. £52,000 7. The consolidated net income for 2021 will be: Answer: C ‘A. P106,000 C. P120,000 + swear to you there are divine things more beautiful than words can tel “s-wiidom Ir the quality that heeps you from getting Inte situations where you need i8.°°* ety man is the architect of his own character. ‘Patience is bitter but its frit is sweet-*** +Great partions, can elevate us to the things that we want to deliver. ropes de ia std ral bg hoveshe nas she Parting is a very sweet sorrow. AFAR-11