89.

d
Dividend paid or declared – S…………………………………………………P 50,000
x: Controlling Interest %…………………………………………………………. 80%
Dividend income of Parent……………………………………………………..P 40,000

90. d
Consolidated Net Income for 20x5
P Company’s net income from own/separate operations…………. P 300,000
Net unrealized gain on sale of equipment (downstream sales) through
depreciation P35,000 – P875) 34,125
P Company’s realized net income from separate operations*…….….. P 265,875
S Company’s net income from own operations…………………………………. P 150,000
Unrealized gain on sales of equipment (upstream sales) (30,000)
Realized gain on sale of equipment (upstream sales) through depreciation 4,500
S Company’s realized net income from separate operations*…….….. P 124,500 124,500
Total P390,375
Less: Amortization of allocated excess…………………… 3,000
Consolidated Net Income for 20x5 P387,375
Less: Non-controlling Interest in Net Income* * 24,300
Controlling Interest in Consolidated Net Income or Profit attributable to
equity holders of parent – 20x5………….. P363,075
*that has been realized in transactions with third parties.

Or, alternatively
Consolidated Net Income for 20x5
P Company’s net income from own/separate operations…………. P 300,000
Net unrealized gain on sale of equipment (downstream sales) through
depreciation P35,000 – P875) 34,125
P Company’s realized net income from separate operations*…….….. P 265,875
S Company’s net income from own operations…………………………………. P 150,000
Unrealized gain on sales of equipment (upstream sales) (30,000)
Realized gain on sale of equipment (upstream sales) through depreciation 4,500
S Company’s realized net income from separate operations*…….….. P 124,500 124,500
Total P390,375
Less: Non-controlling Interest in Net Income* * P 24,300
Amortization of allocated excess…………………… 3,000 27,300
Controlling Interest in Consolidated Net Income or Profit attributable to
equity holders of parent………….. P363,075
Add: Non-controlling Interest in Net Income (NCINI) _ 24,300
Consolidated Net Income for 20x5 P387,375
*that has been realized in transactions with third parties.

**Non-controlling Interest in Net Income (NCINI) for 20x5

S Company’s net income of Subsidiary Company from its own operations P 150,000
(Reported net income of S Company)
Unrealized gain on sales of equipment (upstream sales) ( 30,000)
Realized gain on sale of equipment (upstream sales) through depreciation 4,500
S Company’s realized net income from separate operations……… P 124,500
Less: Amortization of allocated excess 3,000
P 121,500
Multiplied by: Non-controlling interest %.......... 20%
Non-controlling Interest in Net Income (NCINI) - partial goodwill P 24,300
Less: NCI on goodwill impairment loss on full-goodwill . . . . . . . . . . . . . . . . . . . . . 0
Non-controlling Interest in Net Income (NCINI) – full goodwill . . . . . . . . . . . . . P 24,300

91. c – refer to No. 90 for computations

92. d – refer to No. 90 for computations
93. a
Non-controlling Interests (in net assets): 20x5 20x6
Common stock - S, 12/31..….………………………… P 300,000 P 300,000
Retained earnings - S, 12/31:
RE- S, 1/1.…………………………………………….P600,000 P 700,000
+: NI-S………………………………………………… 150,000 200,000
-: Div – S…………………………………………….. 50,000 700,000 70,000 830,000
 Book value of Stockholders’ equity, 12/31…….... P1,000,000 P1,130,000
Adjustments to reflect fair value of net assets
Increase in equipment, 1/1/2010..……..… 75,000 75,000
Accumulated amortization (P3,000 per year)*.…… ( 6,000) ( 9,000)
Fair Value of Net Assets/SHE, 12/31..……………… P1,069,000 P1,196,000
Unrealized gain on sale of equipment (upstream) ( 30,000) **( 25,500)
Realized gain thru depreciation (upstream)……… 4,500 6,000
Realized SHE – S,12/31………………………………….. P1,043,500 P1,176,500
x: NCI %........................................................... ………… ___ 20% 20%
Non-controlling Interest (in net assets) – partial... P 208,700 P 235,300
+: NCI on full goodwill……..…………………………….. 0 0
Non-controlling Interest (in net assets) – full…….. P 208,700 P 235,300
* 20x5: P3,000 x 2 years; 2012: P3,000 x 3 years;
** P30,000 – P4,500 realized gain in 20x5 = P25,500.
Note: Preferred solution - since what is given is the RE – P, 1/1/20x5(beginning balance of the current year) -
Retained earnings – Parent, 1/1/20x5 (cost)…………………………… P 800,000
-: Downstream sale – 20x4 or prior to 20x5, Net unrealized gain 0
Adjusted Retained earnings – Parent, 1/1/20x5 (cost)……………… P 800,000
Retroactive Adjustments to convert Cost to “Equity”:
Retained earnings – Subsidiary, 1/1/20x4……………………….P 500,000
Less: Retained earnings – Subsidiary, 1/1/20x5……………….. 600,000
Increase in Retained earnings since acquisition
(cumulative net income – cumulative dividends)…………P 100,000
Accum. amortization (1/1/x4– 1/1/x5): P2,000 x 1 year…….. ( 3,000)
Upstream Sale – 2010 or prior to 20x5,
Net unrealized gain……………………………..……………….( 0)
P 97,000
X: Controlling Interests %..…………………………………………… 80% 77,600
RE – P, 1/1/20x5 (equity method) = CRE, 1/1/20x5………………… P 877,600
+: CI – CNI or Profit Attributable to Equity Holders of Parent……. 363,075
-: Dividends – P………………………………………………………………….. 100,000
RE – P, 12/31/20x5 (equity method) = CRE, 12/31/20x5………….. P 1,140,675
Or, if RE – P is not given on January 1, 20x5, then RE – P on December 31, 20x5 should be use.
Retained earnings – Parent, 12/31/20x5 (cost model):
(P800,000 + P340,000, P’s reported NI – P100,000)……………… P1,040,000
-: Downstream sale – 20x5 or prior to 12/31/20x5,
Net unrealized gain - (P35,000 – P875)……………………………. 34,125
Adjusted Retained earnings – Parent, 1/1/20x5 (cost model)..…… P1,005,875
Retroactive Adjustments to convert Cost to “Equity”:
Retained earnings – Subsidiary, 1/1/20x4……………………….P 500,000
Less: Retained earnings – Subsidiary, 12/31/20x5
(P600,000 + P150,000 – P50,000)..…………..……………. 700,000
Increase in Retained earnings since acquisition
(cumulative net income – cumulative dividends)……. ….P 200,000
Accumulated amortization (1/1/20x4 – 12/31/20x5):
P 3,000 x 2 years……………………………………………. .( 6,000)
Upstream Sale – 20x5 or prior to 12/31/20x5,
Net unrealized gain – (P30,000 – P4,500)……………. ( 25,500)
P 168,500
x: Controlling Interests %..………………………………………… 80% 134,800
RE – P, 12/31/20x5 (equity method) = CRE, 12/31/20x5…………. P1,140,675
94. c – refer to No, 93 computations.
95. b – refer to No. 93 for computations
96. d – refer to No. 93 for computations
97. b
Consolidated Stockholders’ Equity, 12/31/20x5:
Controlling Interest / Parent’s Interest / Parent’s Portion /
Equity Holders of Parent – SHE, 12/31/20x5:
Common stock – P (P only)……………………………………….. .P 1,000,000
Retained Earnings – P (equity method), 12/31/20x5…………. 1,140,675
 Controlling Interest / Parent’s Stockholders’ Equity……………P2,140,675
Non-controlling interest, 12/31/20x5 (partial/full)…………………… 208,700
Consolidated Stockholders’ Equity, 12/31/20x5……………………….P2,349,375
98. d – the original cost of land
99. b – no intercompany gain or loss be presented in the CFS.
100. a
Consolidated Net Income for 20x4
P Company’s net income from own/separate operations…………. P 200,000
Realized gain on sale of equipment (downstream sales) through depreciation ___0
P Company’s realized net income from separate operations*…….….. P 200,000
S3 Company’s net income from own operations…………………………………. P100,000
S2 Company’s net income from own operations…………………………………. 70,000
S1 Company’s net income from own operations…………………………………. 95,000
Unrealized loss on sale of equipment (upstream sales) – S3 15,000
Unrealized gain on sale of equipment (upstream sales) – S2 ( 52,000)
Unrealized gain on sale of equipment (upstream sales) - S1 ( 23,000)
S Company’s realized net income from separate operations*…….….. P205,000 205,000
Total P405,000
Less: Amortization of allocated excess…………………… 0
Consolidated Net Income for 20x4 P405,000
Less: Non-controlling Interest in Net Income* * (P23,000 + P5,400 + P7,200) 35,600
Controlling Interest in Consolidated Net Income or Profit attributable to
equity holders of parent – 20x4………….. P369,400
*that has been realized in transactions with third parties.
S3 S2 S1
Sales price 145,000 197,000 220,000
Less: Cost 160,000 145,000 197,000
Unrealized (loss) gain ( 15,000) 52,000 23,000

Or, alternatively
Consolidated Net Income for 20x4
P Company’s net income from own/separate operations…………. P 200,000
Realized gain on sale of equipment (downstream sales) through depreciation ___0
P Company’s realized net income from separate operations*…….….. P 200,000
S3 Company’s net income from own operations…………………………………. P100,000
S2 Company’s net income from own operations…………………………………. 70,000
S1 Company’s net income from own operations…………………………………. 95,000
Unrealized loss on sale of equipment (upstream sales) – S3 15,000
Unrealized gain on sale of equipment (upstream sales) – S2 ( 52,000)
Unrealized gain on sale of equipment (upstream sales) - S1 ( 23,000)
S Company’s realized net income from separate operations* P205,000 205,000
Total P405,000
Less: Non-controlling Interest in Net Income* * (P23,000 + P5,400 + P7,200) P 35,600
Amortization of allocated excess…………………… ____0 _ 35,600
Controlling Interest in Consolidated Net Income or Profit attributable to
equity holders of parent………….. P369,400
Add: Non-controlling Interest in Net Income (NCINI) _ _35,600
Consolidated Net Income for 20y0 P405,000
*that has been realized in transactions with third parties.
**Non-controlling Interest in Net Income (NCINI) S3 S2 S1
S Company’s net income of Subsidiary Company from its own
operations (Reported net income of S Company) P 100,000 P 70,000 P 95,000
Unrealized (gain) loss on sale of land (upstream sales) 15,000 ( 52,000) ( 23,000)
S Company’s realized net income from separate operations P 115,000 P 18,000 P 72,000
Less: Amortization of allocated excess 0 0 0
P 115000 P 18,000 P 72,000
Multiplied by: Non-controlling interest %.......... 20% 30% 10%
Non-controlling Interest in Net Income (NCINI) - partial goodwill P 23,000 P 5,400 P 7,200
Less: NCI on goodwill impairment loss on full-goodwill 0 0 0
Non-controlling Interest in Net Income (NCINI) – full goodwill P 23,000 P 5,400 P 7,200

101. b
Non-controlling Interest in Net Income (NCINI) for 20y2
S Company’s net income of Subsidiary Company from its own operations
 (Reported net income of S Company) P 40,000
Unrealized gain on sales of equipment (upstream sales) – year of sale -
Realized gain on sale of equipment (upstream sales) through depreciation
(P14,500 – P9,000) / 5 years 1,100
S Company’s realized net income from separate operations……… P 41,100
Less: Amortization of allocated excess 0
P 41,100
Multiplied by: Non-controlling interest %.......... 20%
Non-controlling Interest in Net Income (NCINI) - partial goodwill P 8,220
Less: NCI on goodwill impairment loss on full-goodwill . . . . . . . . . . . . . . . . . . . . . 0
Non-controlling Interest in Net Income (NCINI) – full goodwill . . . . . . . . . . . . . P 8,220

102. d – the unrealized gain amounted to P15,000 (P60,000 – P45,000).

It should be noted that PAS 27 allow the use of cost model in accounting for investment in subsidiary in the books of
parent company but not the equity method. Since, the cost model is presumed to be the method used, the unrealized
gain of P15,000 (P60,000 – P45,000) will not be recorded in the books of parent company, which give rise to no equity-
adjustments at year-end.