Professional Documents
Culture Documents
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,00
.. 0
Investment in S Co (60,000 x 80%) . . . . . . . . . . . . . . . . . . . . . 32,00
.. 0
Equity Method
Dividends – S Company
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,00
.. 0
Investment in S Co (60,000 x 80%) . . . . . . . . . . . . . . . . . . . . . 32,00
.. 0
Equity Method
Dividends – S Company
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,00
.. 0
Investment in S Co (60,000 x 80%) . . . . . . . . . . . . . . . . . . . . . 32,00
.. 0
Equity Method
d. P233.525
Consolidated Net Income for 20x6
Net income from own/separate operations
Parent Company: Large Company [P200,000 – (P40,000 P170,000
x 75%)]
Small Company 90,000
Total P260,000
Less: Non-controlling Interest in Net Income* P 21,175
Amortization of allocated excess (14,000)
Goodwill impairment _19,300 __26,475
Controlling Interest in Consolidated Net Income or Profit
attributable to equity holders of parent………….. P233,525
Add: Non-controlling Interest in Net Income (NCINI) __21,175
Consolidated Net Income for 20x6 P254,700
*Net income of subsidiary – 20x6 P 90,000
Amortization of allocated excess – 20x6 ( 14,000)
P 104,000
Multiplied by: Non-controlling interest %.......... 25%
P 26,000
Less: Non-controlling interest on impairment loss on full-goodwill ___4,825
( (P19,300 x 25%)*
Non-controlling Interest in Net Income (NCINI) P 21,175
*this procedure would be not be applicable where the NCI on goodwill impairment loss would not be proportionate to
NCI acquired.
Note: Regardless of the method used (cost or equity) answers for No. 2 (a) to (e) above are exactly the same.
Problem II
A.
1.
a. P87,725
Consolidated Net Income for 20x4
Net income from own/separate operations
Pill Company P55,000
Sill Company 40,000
Total P95,000
Less: Non-controlling Interest in Net Income* P 5,775
Amortization of allocated excess 0
Goodwill impairment 1,500 __7,275
Controlling Interest in Consolidated Net Income or Profit
attributable to equity holders of parent………….. P87,725
Add: Non-controlling Interest in Net Income (NCINI) __5,775
Consolidated Net Income for 20x4 P93,500
Note: Regardless of the method used (cost or equity) answers for No. 2 (a) to (e) above are exactly the same.
Problem II
A.
1.
a. P87,725
Consolidated Net Income for 20x4
Net income from own/separate operations
Pill Company P55,000
Sill Company 40,000
Total P95,000
Less: Non-controlling Interest in Net Income* P 5,775
Amortization of allocated excess 0
Goodwill impairment 1,500 __7,275
Controlling Interest in Consolidated Net Income or Profit
attributable to equity holders of parent………….. P87,725
Add: Non-controlling Interest in Net Income (NCINI) __5,775
Consolidated Net Income for 20x4 P93,500
b. P5,775
*Net income of subsidiary – 20x4 P 40,000
Amortization of allocated excess – 20x4 ( 0))
P 40,000
Multiplied by: Non-controlling interest %.......... _____15%
P 6,000
Less: Non-controlling interest on impairment loss on full-goodwill (P1,500 _____225
x 15%)*
Non-controlling Interest in Net Income (NCINI) P 5,775
*this procedure would be not be applicable where the NCI on goodwill impairment loss would not be proportionate to
NCI acquired.
d. P233.525
Consolidated Net Income for 20x6
Net income from own/separate operations
Parent Company: Large Company [P200,000 – (P40,000 P170,000
x 75%)]
Small Company 90,000
Total P260,000
Less: Non-controlling Interest in Net Income* P 21,175
Amortization of allocated excess (14,000)
Goodwill impairment _19,300 __26,475
Controlling Interest in Consolidated Net Income or Profit
attributable to equity holders of parent………….. P233,525
Add: Non-controlling Interest in Net Income (NCINI) __21,175
Consolidated Net Income for 20x6 P254,700
*Net income of subsidiary – 20x6 P 90,000
Amortization of allocated excess – 20x6 ( 14,000)
P 104,000
Multiplied by: Non-controlling interest %.......... 25%
P 26,000
Less: Non-controlling interest on impairment loss on full-goodwill ___4,825
( (P19,300 x 25%)*
Non-controlling Interest in Net Income (NCINI) P 21,175
*this procedure would be not be applicable where the NCI on goodwill impairment loss would not be proportionate to
NCI acquired.
Note: Regardless of the method used (cost or equity) answers for No. 2 (a) to (e) above are exactly the same.
Problem II
A.
1.
a. P87,725
Consolidated Net Income for 20x4
Net income from own/separate operations
Pill Company P55,000
Sill Company 40,000
Total P95,000
Less: Non-controlling Interest in Net Income* P 5,775
Amortization of allocated excess 0
Goodwill impairment 1,500 __7,275
Controlling Interest in Consolidated Net Income or Profit
attributable to equity holders of parent………….. P87,725
Add: Non-controlling Interest in Net Income (NCINI) __5,775
Consolidated Net Income for 20x4 P93,500
b. P5,775
*Net income of subsidiary – 20x4 P 40,000
Amortization of allocated excess – 20x4 ( 0))
P 40,000
Multiplied by: Non-controlling interest %.......... _____15%
P 6,000
Less: Non-controlling interest on impairment loss on full-goodwill (P1,500 _____225
x 15%)*
Non-controlling Interest in Net Income (NCINI) P 5,775
*this procedure would be not be applicable where the NCI on goodwill impairment loss would not be proportionate to
NCI acquired.
Chapter 19
Problem I
1. Indirect Exchange Rates
Philippine Viewpoint:
1 $ = P40; 1 Peso = $0.025 ($1/P40)
1 Singapore dollar = P32.00; 1 Peso = 0.03125 Singapore (1 Singapore Dollar/P32)
Peso P8,000
2. FCU = = = $200; or
Direct Exchange Rate P40.00
Problem II
a. Exchange rates:
Arrival Date Departure Date
2. The direct exchange rate has decreased. This means that the peso has strengthened during Mr. Alt's
visit. For example, upon arrival, Mr. Alt had to pay P33 per each dollar. Upon departure, however,
each dollar is worth just P32.50. This means that the relative value of the peso has increased or,
alternatively, the value of the dollar has decreased.
3. The Philippine peso equivalent values for the 100 Singapore dollars are:
Arrival date
100 dollars x P33.00 = P3,300
Departure date
100 dollars x P32.50 = 3,250
Foreign Currency Transaction Loss P 50
Mr. Alt held dollars for a time in which the dollars was weakening against the peso. Thus, Mr. Alt
experienced a loss by holding the weaker currency.
Problem III
1. If the direct exchange rate increases, the peso weakens relative to the foreign currency unit. If the
indirect exchange rate increases, the peso strengthens relative to the foreign currency unit.
2.
Importing Peso NA NA NA NA
Importing L G G L
LCU
Exporting Peso NA NA NA NA
Exporting LCU G L L G
Problem IV
1.
December 1, 20x4 (Transaction date):
Purchases…………………….. 973,200
Accounts payable ($24,000 x P40.55)……………………………… 973,200
2.
a.
a.1. None – transaction date (December 1, 20x4)
a.2. P6,000 loss
a.3. P3,600 gain (March 1, 20x5)
b.
b.1. P979,200 – spot rate on the balance sheet date or current rate on the balance sheet
b.2. P973,200 – spot rate on the transaction date or historical rate on the balance sheet date.
Problem V
1. December 1, 20x4 (Transaction date):
Accounts receivable ($60,000 x P40.00)……………………………… 2,400,000
Sales 2,400,000
Theories
Completion Statements
1. International Accounting Standards Board
2. International Accounting Standards
3. commodities
4. conversion
5. translation
6. indirect
7. direct
8. floating, free
9. spot
10. differential rates of inflation
11. purchasing power parity theory
12. denominated
13. measures
14. exposed asset position
15. exposed liability position
16. transaction date
17. bank wire transfers