Problem 1

January 5 Financial Assets at FVTOCI 500,000.00

Cash 500,000.00
March 3 Investments in Subsidiary 3,780,000.00
Cash 3,780,000.00
Investments in Subsidiary (3,780,000/70% x 10%) 540,000.00
Financial Assets at FVTOCI 500,000.00
Gain on Remeasurement 40,000.00

Fair Value of the Assets 7,300,000.00

Less: Fair Value of the Liabilities 2,600,000.00
Fair Value of the Net Assets 4,700,000.00

Investments in Subsidiary (P 3,780,000 + P 540,000) 4,320,000.00

Add: Fair Value of the Non-Controlling Interest 950,000.00
Total Consideration 5,270,000.00

Fair Value of the Net Assets 4,700,000.00

Less: Book Value of the Net Assets (P 5,900,000 - P 2,600,000) 3,300,000.00
Allocated Excess 1,400,000.00

Total Consideration 5,270,000.00

Less: Fair Value of the Net Assets 4,700,000.00
Goodwill under Full Fair Value Basis or Full Goodwill 570,000.00

Investments in Subsidiary 4,320,000.00

Less: Share of the CI in the FVNA (P 4,700,000 x 80%) 3,760,000.00
Goodwill under Proportionate Share Basis or Partial Goodwill 560,000.00

Problem 2

Investments in Subsidiary 8,400,000.00

Less: Share of the CI in the FVNA (P 9,500,000 x 80%) 7,600,000.00
Goodwill under Proportionate Share Basis or Partial Goodwill 800,000.00

Grossed-Up Value (P 8,400,000 / 80%) 10,500,000.00

Less: FVNA 9,500,000.00
Goodwill under Full Fair Value Basis or Full Goodwill 1,000,000.00

Total Consideration (P 8,400,000 + P 1,950,000) 10,350,000.00

Less: FVNA 9,500,000.00
Goodwill 850,000.00
Problem 3

Fair Value of the Assets (P 160,000 + P 130,000 + P 400,000 + P 200,000) 890,000.00

Less: Fair Value of the Liabilities (P 50,000 + P 40,000) 90,000.00
Fair Value of the Net Assets 800,000.00

Item BV FV Excess Amt. Period Amortization

Cash and Receivables 160,000.00 160,000.00 - - -
Inventory 100,000.00 130,000.00 30,000.00 Immediate 30,000.00
Building 300,000.00 400,000.00 100,000.00 5 years 20,000.00
Equipment 250,000.00 200,000.00 (50,000.00) 5 years (10,000.00)
Accounts Payable 50,000.00 50,000.00 - - -
Bonds Payable 40,000.00 40,000.00 - - -
Total Amortization 40,000.00

Net Income of the Subsidiary 200,000.00

Less: Total Amortization for the Year (40,000.00)
Adjusted Net Income of the Subsidiary 160,000.00

Investment in Subsidiary 500,000.00

Cash 500,000.00

Investment in Subsidiary 500,000.00

Non-Controlling Interest (P 220,000 or P 800,000 x 30% whichever is higher) 240,000.00
Total Consideration 740,000.00

Total Consideration 740,000.00

Less: Fair Value of the Net Assets 800,000.00
Gain on Bargain Purchase 60,000.00

Net Income of the Parent 262,500.00

Add: Gain on Bargain Purchase 60,000.00
Adjusted Net Income of the Parent 322,500.00

Adjusted Net Income of the Parent 322,500.00

Add: Adjusted Net Income of the Subsidiary 160,000.00
Consolidated Net Income 482,500.00
Less: Share of the NCI in the NI of the Subsidiary (P 160,000 x 30%) 48,000.00
CNI Attributable to the Controlling Interest 434,500.00

Non-Controlling Interests, Beginning 240,000.00

Add: Share of the NCI in the NI of the Subsidiary 48,000.00
Less: Share of the NCI in the Dividends Declared by the Subsidiary (P 50,000 x 30%) 15,000.00
Non-Controlling Interests, Ending 273,000.00
Retained Earnings - Parent, Beginning 825,000.00
Add: CNI Attributable to the Controlling Interest 434,500.00
Less: Dividends Declared by the Parent 80,000.00
Consolidated Retained Earnings, Ending 1,179,500.00

Common Stock - Parent 750,000.00

APIC - Parent 150,000.00
Consolidated Retained Earnings, Ending 1,179,500.00
Non-Controlling Interests, Ending 273,000.00
Consolidated Shareholders' Equity, Ending 2,352,500.00

Consolidated Accounts Payable (P 450,000 + P 50,000) 500,000.00

Consolidated Bonds Payable (P 750,000 + P 40,000) 790,000.00
Consolidated Dividends Payable (P 80,000 + 0) 80,000.00
Consolidated Liabilities 1,370,000.00

Consolidated Liabilities 1,370,000.00

Add: Consolidated Shareholders' Equity, Ending 2,352,500.00
Consolidated Assets 3,722,500.00