Billed

Beginning Inventory, Home Office ₱ 24,000

Beginning Inventory, from Supplier ₱ 6,000
Total Beginning Inventory ₱ 30,000
Shipment from Home Office ₱ 250,000
Purchases from Suppliers ₱ 100,000
Total Goods Available for Sale ₱ 380,000
Ending Inventory, Home Office, last year ₱ 12,000
Ending Inventory, Home Office, this year ₱ 25,000
Ending Inventory, from Supplier ₱ 13,000
Total Ending Inventory ₱ 50,000
COGS ₱ 330,000

1 Sales ₱ 500,000
COGS ₱ 330,000
GPR ₱ 170,000
OPEX ₱ 40,000
Net Income ₱ 130,000

2 Ending Inventory, Home Office ₱ 80,000

Ending Inventory, Branch ₱ 43,000
Total Ending Inventory ₱ 123,000

3 COGS overstatement ₱ 47,000

4 Sales ₱ 1,000,000
COGS ₱ 170,000
GPR ₱ 830,000
OPEX ₱ 150,000
Net Income - Home Office ₱ 680,000
Net Income - Branch ₱ 177,000
Net Income ₱ 857,000

Billed
Beginning Inventory, Home Office ₱ 70,000
Beginning Inventory, from Supplier ₱ 70,000
Total Beginning Inventory ₱ 140,000
Shipment from Home Office ₱ 500,000
Purchases from Suppliers ₱ 250,000
Total Goods Available for Sale ₱ 890,000
Ending Inventory, Home Office ₱ 150,000
Ending Inventory, from Supplier ₱ 50,000
Total Ending Inventory ₱ 200,000
COGS ₱ 690,000
 5 Home
Sales ₱ 1,000,000
COGS ₱ 600,000
GPR ₱ 400,000
OPEX ₱ 200,000
Net Income ₱ 200,000

6 Understatement ₱ 90,000

7 and 8 Home
Unadjusted Balance ₱ 110,000
Lipa collection ₱ 20,000
HO paid payable
Lipa Branch ₱ 30,000
Inventory -₱ 40,000
Credit memo
Loss -₱ 40,000
Total ₱ 80,000

29 Home
Unadjusted Balance ₱ 150,000
Merchandise in transit
Collection of AR ₱ 10,500
Cash sent by HO ₱ 22,500
Overstatement of Branch profit -₱ 1,080
Supplies returned -₱ 6,000
₱ 175,920

30 Inv. in Branch ₱ 129,000

Merchandise Allowance -₱ 180
Advance -₱ 1,650
Debit memo -₱ 2,700
HO ₱ 124,470

31 and 32 HO
Transfer of fixed assets
Marketing expense -₱ 30,000
Debit Memo
Cash Transfer -₱ 197,100
Debit memo
Net Adjustments -₱ 227,100

33 HO
Unadjusted Balance ₱ 526,560
Labor
 Freight
Furnitures and fixtures
Merchandise Allowance
Interest
Sale of Truck
Bill for repairs
Adjusted Balance
34 TGAS at BP
TGAS at cost
AFOBI
35
Beginning Inventory, Home Office
Beginning Inventory, from Supplier
Total Beginning Inventory
Shipment from Home Office
Purchases from Suppliers
Total Goods Available for Sale
Ending Inventory, Home Office
Ending Inventory, from Supplier
Total Ending Inventory
COGS
Sales
COGS
GPR
OPEX
Net Income
36
Beginning Inventory, Home Office
Beginning Inventory, from Supplier
Total Beginning Inventory
Shipment from Home Office
Purchases from Suppliers
Total Goods Available for Sale
37 Jan. 1, 2034 Balance
Jan. 3, Cash received from branch
Jan. 4, Shipments to branch
Jan. 28, Expense allocation
Jan. 28, Shipments to branch
₱ 15,000
₱ 541,560
₱ 107,520
₱ 76,800
₱ 30,720
Billed
₱ 70,000
₱ 10,000
₱ 80,000
₱ 350,000
₱ 30,000
₱ 460,000
₱ 84,000
₱ 16,000
₱ 100,000
₱ 360,000
Branch
₱ 600,000
₱ 264,000
₱ 336,000
₱ 180,000
₱ 156,000
Billed
₱ 10,000
₱ 5,000
₱ 15,000
₱ 35,000
₱ 80,000
₱ 130,000
60,000
-80,000
120,000
52,400
24,000
 Jan. 28, Collection from branch customer -18,000
Jan. 28, Supplies purchased for branch and shipped to branch 8,000
Total ₱ 166,400
Cash remitted to Home Office -₱ 30,000
Merchandise Returns -₱ 12,000
Adjusted Balance ₱ 124,400

Total

38
Fair Value of Business ₱ 1,780,000.00
Fair Value of Interest in Net Assets in Subsidiary ₱ 1,200,000.00
Goodwill ₱ 580,000.00

Total

39
Fair Value of Business ₱ 1,200,000.00
Fair Value of Interest in Net Assets in Subsidiary ₱ 1,000,000.00
Goodwill ₱ 200,000.00

40 Fair Value of Business ₱ 966,000.00

Fair Value of Interest in Net Assets in Subsidiary ₱ 864,000.00
Goodwill ₱ 102,000.00

41 BV of Acquirer ₱ 1,680,000
FV of Acquiree ₱ 1,104,000
Goodwill ₱ 102,000
Paid Costs ₱ 138,000
Consolidated Assets ₱ 2,748,000

42 BV of Acquirer ₱ 1,770,000
FV of Acquiree ₱ 697,000
Goodwill ₱ 132,000
Paid Costs ₱ 25,000
Consolidated Assets ₱ 2,574,000

43 Liabilities of Acquirer at BV ₱ 480,000

Liabilities of Acquiree at FV ₱ 79,000
Total Liabilities ₱ 559,000
44 Retained Earnings ₱ 860,000

45 Shares of Acquirer ₱ 400,000

Issued Shares ₱ 60,000
Total Shares ₱ 460,000
 Cost AFOBI
₱ 20,000 ₱ 4,000 120%
₱ 6,000 ₱ -
₱ 26,000 ₱ 4,000
₱ 200,000 ₱ 50,000 125%
₱ 100,000 ₱ -
₱ 326,000 ₱ 54,000
₱ 10,000 ₱ 2,000 120%
₱ 20,000 ₱ 5,000 125%
₱ 13,000 ₱ -
₱ 43,000 ₱ 7,000
₱ 283,000 ₱ 47,000

Cost AFOBI
₱ 50,000 ₱ 20,000 40%
₱ 70,000 ₱ -
₱ 120,000 ₱ 20,000
₱ 400,000 ₱ 100,000 25%
₱ 250,000 ₱ -
₱ 770,000 ₱ 120,000
₱ 120,000 ₱ 30,000
₱ 50,000 ₱ -
₱ 170,000 ₱ 30,000
₱ 600,000 ₱ 90,000
 Branch Total
₱ 800,000 ₱ 1,800,000
₱ 600,000 ₱ 1,200,000
₱ 200,000 ₱ 600,000
₱ 100,000 ₱ 300,000
₱ 100,000 ₱ 300,000

Branch
₱ 100,000

₱ 10,000

-₱ 30,000

₱ 80,000

Branch
₱ 115,920
₱ 37,500

₱ 22,500

₱ 175,920

Branch
₱ 161,880

-₱ 225,000

₱ 270
-₱ 62,850

Branch
₱ 552,839
-₱ 1,500
 ₱ 2,417
₱ 270
₱ 150
₱ 1,275
-₱ 15,000
₱ 1,110
₱ 541,560

Cost AFOBI
₱ 50,000 ₱ 20,000
₱ 10,000 ₱ -
₱ 60,000 ₱ 20,000
₱ 250,000 ₱ 100,000 40%
₱ 30,000 ₱ -
₱ 340,000 ₱ 120,000
₱ 60,000 ₱ 24,000
₱ 16,000 ₱ -
₱ 76,000 ₱ 24,000
₱ 264,000 ₱ 96,000

Cost AFOBI
₱ 8,000 ₱ 2,000
₱ 5,000
₱ 13,000 ₱ 2,000
₱ 25,000 ₱ 10,000
₱ 80,000 ₱ -
₱ 118,000 ₱ 12,000
Purchase Price with Non-Controlling Interest
Control Premium

₱ 1,420,000.00 ₱ 360,000.00
₱ 840,000.00 ₱ 360,000.00
₱ 580,000.00 ₱ -

Purchase Price with Non-Controlling Interest

Control Premium

₱ 920,000.00 ₱ 280,000.00
₱ 750,000.00 ₱ 250,000.00 75%
₱ 170,000.00 ₱ 30,000.00
 1 FV of Building ₱ 600,000
BV of Building ₱ 400,000
Undervaluation ₱ 200,000
RUL 20
Annual UVA ₱ 10,000
Years passed ₱ 3
UVA ₱ 30,000

FV of Building ₱ 600,000
UVA ₱ 30,000
Building, 2030 ₱ 570,000

2 Patent ₱ 90,000
Writeoff ₱ 18,000
Patent, 2031 ₱ 72,000

3 Hefty expenses ₱ 1,242,000

Robust expenses ₱ 1,428,000
Overvaluation of Patent ₱ 14,000
Total Expenses ₱ 2,684,000

4 IFOOP ₱ 600,000
SNI ₱ 120,000
OVA -₱ 18,000
CNI-P ₱ 702,000

5 NCI Proportionate Share ₱ 60,000

NCI-NI ₱ 4,000
Dividends to Subsidiary -₱ 2,000
NCI, 2030 ₱ 62,000

8 CNI-P ₱ 500,000
SNI -₱ 12,000
IFOOP ₱ 488,000
SNI ₱ 135,000
Intercompany bonds -₱ 15,000
CNI-P ₱ 608,000

9 RE beginning ₱ 2,000,000
CNI-P ₱ 768,000
Dividends -₱ 200,000
RE, 2030 ₱ 2,568,000

10 IFOOP ₱ 800,000
 SNI ₱ 200,000
Gain on BPO ₱ 20,000
CCI ₱ 1,020,000

11 Total
Fair Value of Business ₱ 2,025,000.00
Fair Value of Interest in Net Assets in Subsidiary ₱ 1,650,000.00
Goodwill ₱ 375,000.00

80%

Consolidated Net
Income-Parent (CNI-P)
11, 12, 13 Income From Own Operation of the Parent (IFOOP)/ Separate I ₱ 712,500.00
Share in Net Income of Subsidiary - can be fractional ₱ 210,000.00
Amortization of Undervalued Asset (UVA/RL) - can be fractional ₱ 24,000.00

Amortization of Overvalued Asset (OVA/RL) - can be fractional ₱ -

Gain on BPO - only in the year of business combination ₱ -
Impairment Loss based on the Goodwill Ratio - current year ₱ 48,000.00
Net Income ₱ 850,500.00

14 Total
Fair Value of Business ₱ 309,000.00
Fair Value of Interest in Net Assets in Subsidiary ₱ 330,000.00
Gain on BPO -₱ 21,000.00

70%

Consolidated Net
Income-Parent (CNI-P)
Income From Own Operation of the Parent (IFOOP)/ Separate I ₱ 986,000.00
Share in Net Income of Subsidiary - can be fractional ₱ 105,000.00
Amortization of Undervalued Asset (UVA/RL) - can be fractional ₱ 14,000.00

Amortization of Overvalued Asset (OVA/RL) - can be fractional ₱ 4,200.00

Gain on BPO - only in the year of business combination ₱ 21,000.00
Impairment Loss based on the Goodwill Ratio - current year ₱ -
Net Income ₱ 1,102,200.00
15 Non-conrolling Interest in Net Assets, beg (FV or proportionate ₱ 99,000.00
NCI-NI ₱ 40,800.00
Dividend to NCI (Div. Declared x Percentage NCI) ₱ 6,000.00
NCI in Net Assets, end ₱ 133,800.00

Consolidated Net
16 Income-Parent (CNI-P)
Income From Own Operation of the Parent (IFOOP)/ Separate I ₱ 986,000.00
Share in Net Income of Subsidiary - can be fractional ₱ 105,000.00
Amortization of Undervalued Asset (UVA/RL) - can be fractional ₱ 14,000.00
Amortization of Overvalued Asset (OVA/RL) - can be fractional ₱ 4,200.00
Gain on BPO - only in the year of business combination ₱ 21,000.00
Impairment Loss based on the Goodwill Ratio - current year ₱ -
Net Income ₱ 1,102,200.00

17 Parent Retained Earnings, First year ₱ 2,000,000.00

Consolidated Net Income-Parent ₱ 1,102,200.00
Dividends by parent ₱ 200,000.00
Consolidated RE-Parent, End of First Year ₱ 2,902,200.00

18 Sales of Parent ₱ 2,000,000.00

Sales of Subsidiaries ₱ 1,000,000.00
Intercompany Sales between P and S at Selling Price ₱ 400,000.00
Intercompany Sales between subsidiaries at Selling Price ₱ -
Consolidated Sales ₱ 2,600,000.00

19 Downstream
Sales ₱ 280,000.00
Cost of Sales ₱ 200,000.00
Gross Profit ₱ 80,000.00
Gross Profit Rate ₱ 0.29
Ending Balance ₱ 70,000
RPBI/UPEI ₱ 20,000

20 COS of Parent - during the year ₱ 1,200,000

COS of Subsidiaries - during the year ₱ 700,000
Intercompany Sales between P and S at SP ₱ 400,000
Intercompany Sales between subsidiaries at Selling Price ₱ -
UPEI ₱ 72,000
RPBI ₱ 20,000
Amortization of Undervalued Inventory ₱ -
Amortization of Overvalued Inventory ₱ -
Consolidated Cost of Sales ₱ 1,552,000
 Sales ₱ 2,600,000
Cost of Sales ₱ 1,552,000
Gross Profit ₱ 1,048,000

20,21 60%

Consolidated Net
Income-Parent (CNI-P)
Income From Own Operation of the Parent (IFOOP)/ Separate ₱ 470,000
Share in Net Income of Subsidiary - can be fractional ₱ 120,000
Amortization of Undervalued Asset (UVA/RL) - can be fractiona ₱ -

Amortization of Overvalued Asset (OVA/RL) - can be fractional ₱ -

Gain on BPO - only in the year of business combination ₱ -
Impairment Loss based on the Goodwill Ratio - current year ₱ -
Unrealized Profit Ending Inventory (UPEI) downstream ₱ -
Realized Profit Beginning Inventory (RPBI) downstream ₱ 20,000
Unrealized Profit Ending Inventory (UPEI) upstream ₱ 43,200
Realized Profit Beginning Inventory (RPBI) upstream ₱ -
Net Income ₱ 566,800.00

22 Impairment Loss 0

23 Parent Retained Earnings, First year ₱ 300,000.00

Consolidated Net Income-Parent ₱ 113,785.00
Dividends by parent ₱ 63,000.00
Consolidated RE-Parent, End of First Year ₱ 350,785.00

24 Sales ₱ 620,000
Cost of Sales ₱ 420,000
Gross Profit ₱ 200,000
Expenses ₱ 91,000
Net Income ₱ 109,000

25 Ending Inventory from Home Office ₱ 60,000

Ending Inventory from Outside Suppliers ₱ 10,000
Ending Inventory ₱ 70,000
 Purchase Price with
Non-Controlling Interest
Control Premium
₱ 1,620,000.00 ₱ 405,000.00

₱ 1,320,000.00 ₱ 330,000.00
₱ 300,000.00 ₱ 75,000.00

20% 100%

Consolidated Net
Non-Controlling Interest- Income (CNI)
Net Income (NCI-NI)
₱ 712,500.00
₱ 52,500.00 ₱ 262,500.00
₱ 6,000.00 ₱ 30,000.00
₱ - ₱ -
₱ -
₱ 12,000.00 ₱ 60,000.00
₱ 34,500.00 ₱ 885,000.00

Purchase Price with Non-Controlling Interest

Control Premium
₱ 210,000.00 ₱ 99,000.00

₱ 231,000.00 ₱ 99,000.00
-₱ 21,000.00 ₱ -

30% 100%

Consolidated Net
Non-Controlling Interest- Income (CNI)
Net Income (NCI-NI)
₱ 986,000.00
₱ 45,000.00 ₱ 150,000.00
₱ 6,000.00 ₱ 20,000.00
₱ 1,800.00 ₱ 6,000.00
 ₱ 21,000.00
₱ - ₱ 60,000.00
₱ 40,800.00 ₱ 1,143,000.00

Upstream
₱ 400,000.00
₱ 280,000.00
₱ 120,000.00
₱ 0.30
₱ 240,000
₱ 72,000
 40%

Non-Controlling
Interest-Net Income
(NCI-NI)

₱ 80,000
₱ -
₱ -

₱ -
₱ -
₱ -
₱ 28,800
₱ -
₱ 51,200.00
 1 Pure expenses ₱ 2,150,000
Sterling expenses ₱ 800,000
Total AR ₱ 2,950,000

2 Spirit AR ₱ 440,000
Passion AR ₱ 260,000
AR ₱ 700,000

3 Ending Inventory ₱ 100,000

Gross Profit Rate 40%
UPEI ₱ 40,000

4 Consolidated Sales ₱ 616,000

Tranquility Sales ₱ 400,000
Silence Sales ₱ 280,000
Intercompany Sales ₱ 64,000
Cost of Sales ₱ 18,000
Gross Profit ₱ 46,000

5 BONUS

6 Combined Current Assets, unadj. ₱ 640,000

UPEI ₱ 10,000
UPEI ₱ 24,000
Combined Current Assets, adj. ₱ 606,000

7 Accumulated Depreciation 2020 ₱ 50,000

Depreciation in 2021 ₱ 10,000
Accumulated Depreciation 2021 ₱ 60,000

Cost of equipment ₱ 200,000

8 BONUS

9 BONUS

10 Beginning Inventory ₱ 900,000

Purchases ₱ 4,500,000
Ending Inventory ₱ 405,000
Cost of Goods Sold ₱ 4,995,000

11 Sales Parent ₱ 2,000,000

Sales Subsidiary ₱ 1,600,000
Intercompany Sales ₱ 800,000
 Consolidated Sales ₱ 2,800,000

12 2019
Ending Inventory ₱ 200,000
Gross Profit Rate 20%
UPEI ₱ 40,000

13 COGS Parent ₱ 1,600,000

COGS Subsidiary ₱ 1,280,000
Intercompany Sales ₱ 800,000
UPEI ₱ 50,000
RPBI ₱ 40,000
COGS ₱ 2,090,000

14 Unrealized Gain ₱ 1,500,000

Gain ₱ 2,000,000
Total Gain ₱ 3,500,000

15 Cost ₱ 750,000
RUL ₱ 3
Depreciation ₱ 250,000

16 Gain ₱ 750,000
Truck ₱ 150,000
Accumulated Depreciation

17 IFOOP ₱ 4,900,000
SNI ₱ 1,650,000
UG ₱ 450,000
RG ₱ 150,000
CNI-P ₱ 6,250,000

18 SNI ₱ 1,100,000
UG ₱ 300,000
RG ₱ 100,000
NCI-NI ₱ 900,000

19 Land ₱ 1,900,000

20 Gain or loss on sale 0

21 PNI ₱ 2,000,000
SNI- Luke ₱ 920,000
SNI - Alex ₱ 126,000
 SNI - Haley ₱ 648,000
CNI-P ₱ 3,694,000

22 Impairment Loss 0

23 Parent Retained Earnings, First year ₱ 300,000.00

Consolidated Net Income-Parent ₱ 113,785.00
Dividends by parent ₱ 63,000.00
Consolidated RE-Parent, End of First Year ₱ 350,785.00

24, 25 Billed
Shipment from Home Office ₱ 550,000
Purchases from Suppliers ₱ 50,000
Total Goods Available for Sale ₱ 600,000
Ending Inventory, Home Office ₱ 75,000
Ending Inventory, from Supplier ₱ 10,000
Total Ending Inventory ₱ 85,000
COGS ₱ 515,000

Sales ₱ 620,000
Cost of Sales ₱ 420,000
Gross Profit ₱ 200,000
Expenses ₱ 91,000
Net Income ₱ 109,000
 2020
₱ 250,000
20%
₱ 50,000

₱ 900,000
 Cost AFOBI
₱ 440,000 ₱ 110,000
₱ 50,000 ₱ -
₱ 490,000 ₱ 110,000
₱ 60,000 ₱ 15,000
₱ 10,000 ₱ -
₱ 70,000 ₱ 15,000
₱ 420,000 ₱ 95,000