c.

P600,000
d. P650,000

6. On December 31,2013, Parco Corporation purchased 80% of the outstanding common stock
of Stop Company for P395,000 cash. The condensed statement of financial position of Stop
Company as of the date of the purchase is shown below (in thousands):
Assets Liabilities and stockholders’ equity
Cash P150 Liabilities P400
Inventories 250 Common stock, P1 par value 50
Property & equipment (net) 450 Additional paid in capital 100
Retained earnings 300
Total P850 Total P850
On December 31,2013, the inventories and property and equipment of Stop had a fair values of
P275,000 and P500,000 respectively. The fair value of NCI on December 31,2013 is P100,000.

How much goodwill (gain on acquisition) must be shown in the consolidated statement of
financial position of Parco Corporation and its subsidiary Stop Company on December 31,2013?
a. P(30,000)
b. P30,000
c. P(25,000)
d. P25,000

7. On January 2,2013, Papa, Inc. acquired 80% of the outstanding shares of Son Company for
P1,952,000 cash. At the time of the acquisition, the stockholders’ equity section of the two
companies is shown below:
(in thousands)
Papa Inc. Son Company
Common stock P4,000 P1,600
Additional paid in capital 3,000 480
Retained earnings 6,840 420
total P13,840 P2,500
Assuming NCI is measured at its implied fair value. What is the stockholders’ equity on the
consolidated of financial position on January 2,2013?
a. P13,840,000
b. P14,328,000
c. P17,260,000
d. P15,440,000

8. The condensed statement of financial position of Pop Corporation and Sun Company as of
October 31,2013 are presented below:
Pop Corp. Sun Co.
Assets P3,800,000 P850,000
liabilities 1,350,000 250,000
Common stock, P100 par 1,500,000 500,000
Retained earnings 950,000 100,000
total P3,800,000 P3,800,000
On October 31,2013, Pop Corporation acquired 4,000 shares of Sun Company at P520,000. The
market price of the 1,000 shares of Sun on October 31,2013 is P140 per share.

In the consolidated statement of financial position on October 31,2013, total assets and the
stockholders’ equity are to be reported at:
Total assets Stockholders’ equity
a. P4,170,000 P2,570,000
b. P4,190,000 P2,590,000
c. P4,562,000 P2,450,000
d. P4,562,000 P2,500,000

9. Pit Corporation acquired 80% of the outstanding stock of Sam Company. The separate
statement of financial position of Pit Corporation immediately after the acquisition and the
consolidated statement of financial position are as follows:
Pit Corp. Consolidated
Current assets P106,000 P146,600
Investment in Sam Company 100,000 -0-
Goodwill -0- 7,500
Property & equipment (net) 270,000 359,900
Total

Current liabilities P15,000 P28,000

NCI -0- 25,000
Capital stock 350,000 350,000
Retained earnings 111,000 111,000
total P476,000 P514,000

P12,500 of the excess payment for the investment in Sam was ascribed to undervaluation of its
property and equipment; the balance of the excess payment was ascribed to goodwill. Current
assets of Sam included a P2,000 receivable from Pit which arose before the combination.

What was the total of the current assets on Sam’s separate statement of financial position at
the time Pit acquired its 80% interest?
a. P104,000
b. P38,000
c. P42,000
d. P40,000

10. Using the same data in No. 9, what was the stockholders’ equity of Sam Company before Pit
acquired its 80% interest?