On January 1, 2020, Pranpiya, Inc.

reports net assets of P880,000 although a patent (with a 10-year life) having a
book value of P330,000 is now worth P400,000. Manoban Corporation pays P840,000 on that date for an 80
percent ownership in Manoban.On December 31, 2021, Pranpiya reports total expenses of P621,000 while
Manoban reports expenses of P714,000. What is the consolidated total expense balance on December 31, 2021?
a. P1,197,800 b. P1,335,000. C. P1,342,000 d. P1,349,000

Sol:
Pranpiya expense-2021. 621,000
Manoban expenses-2021. 714,000
Amortization of allocated excess (400,000-330,000) / 10 years. 7,000 721,000
Consolidated total expense for 2021. 1,342,000

Kim company acquired 90 percent of Park Chaeyoung Company on January 1, 2020, for P234,000 cash. Park
Chaeyoung's stockholders' equity consisted of common stock of P160,000 and retained earnings of P80,000. An
analysis of Park Chaeyoung's net assets revealed the following: Any excess consideration transferred over fair
value is attributable to an unamortized patent with a useful life of 5 years.

BOOK VALUE FAIR VALUE

Building (10 years life) 10,000 8,000
Equipment (4 years life) 14,000 18,000
Land 5,000 12,000

In consolidation at January 1, 20x6, what adjustment is necessary for Hogan's Buildings account?
a. P2,000 increase b.P1,800 increase c. P2,000 decrease d. P1,800 decrease

SOL.
decrease in building account:
FV 8,000
BV 10,000
decreas
e 2,000