Step 1: Analysis of effects of intercompany transaction

Total dividends declared ₱100,000

Allocation:
Owner of the parent (100,000 x 75%) 75,000
Non-controlling interest (100,000 x 25%) 25,000
As allocated
100,000

Step 2: Analysis of net assets

SUBSIDIARY ACQUISITION CONSOLIDATION NET CHANGE

DATE DATE
Net assets at carrying amounts. 240,000 320,000
Fair value adjustments at
Acquisition date - -
Subsequent depreciation
Of FVA NIL -
Unrealized profits (upstream
Only) NIL -

Subsidiary’s net assets at fair value 240,000 320,000 80,000

Step 3: Goodwill Computation

We can leave out this page because the information is insufficient.

Step 4: Non- controlling interest in net assets

Sub’s net assets at fair value – Dec. 31, 2021 (step 2) 320,000
Multiply by: NCI percentage 25%
Total 80,000
Add: Goodwill to NCI net of accumulated impairment losses -
Non- controlling interest in net assets – Dec. 31, 2021 80,000

STEP 5: Consolidated retained earnings

Parents retained earnings- Dec. 31,2021 280,000

Consolidated adjustments:
Parents sh. In the net change in sub.’s net assets 60,000
Unrealized profits (downstream only) -
Gain or loss on extinguishment of bonds
Impairments loss on goodwill attributable to parent -
Net consolidation adjustments 60,000
Consolidated retained earnings – Dec. 31, 2021 340,000
Step 6: Consolidation profit or loss
Parent subsidiary consolidated
Profit before adjustment 475,000 132,000 607,000
Consolidation Adjustments:
Unrealized Profits - - -
Dividend Income from Subsidiary (75,000) N/A (75,000)
Gain or loss on extinguishment of bonds - - -
Net consolidation Adjustment (75,000) - (75,000)
Profit before FVA (40,000) 132,000 532,000
Depreciation of FVA (-) (-) (-)
Impairment loss on goodwill (-) (-) (-)
Consolidation profit 400,000 132,000 532,000

Step 7: Profit or loss attributable to owners of parent and NCI

Owners of parent NCI Consolidated

Parent’s profit before FVA (step 6) 400,000 N/A 400,000
Share in sub’s profit before FVA 99,000 33,000 132,000
Depreciation of FVA (Step 6) - - -
Share in impairment loss on goodwill - - -
Totals 499,000 33,000 532,000