Problem 1

Consideration transferred (35000*25) 875,000

Contingent consideration 15,000
Total 890,000
Less: Fair value of net assets acquired
(65000+630000-35000) - 660,000
Goodwill 230,000

Total assets - Love (900000-34000-19000) 847,000

Total assets - You (65000+630000) 695,000
Goodwill 230,000
Total assets 1,772,000

Problem 2

Case 1 Condireration transferred 6,000,000

Less: FV of net assets
(6400000-1600000) 4,800,000
Goodwill 1,200,000

Condireration transferred 6,000,000

Less: FV of net assets
(40000+480000+1400000+4400000-1600000) 4720000
Goodwill 1,280,000

Case 2 Condireration transferred 4,000,000

Less: FV of net assets
(6400000-1600000) 4,800,000
Goodwill - 800,000

Condireration transferred 4,000,000

Less: FV of net assets
(40000+480000+1400000+4400000-1600000) 4,720,000
Goodwill - 720,000
Problem 4

Consideration transferred 1,950,000

NCI (1630000*20%) 326,000
Total 2,276,000
Less: Fair value of net assets acquired - 1,630,000 100
Goodwill 646,000 260
620
Problem 5 1000
200
Consideration transferred 190,000 300
NCI (165000*10%) 16,500 -560
Total 206,500 -110
Less: Fair value of net assets acquired 165,000 -180
Goodwill 41,500 1630

Total assets Mickey (815000-190000) 625,000

Total assets Minnie 305,000
Goodwill 41,500
Total assets 971,500

Problem 6

Ordinary shares 600,000

Retained earnings 85,000
NCI 16,500
Total shareholder's equity 701,500
 Problem 7-8

2021
Parent
Net income from own operations 200,000
Add (less) amortization of excess
Undervaluation of assets (750000-500000)/5
Consolidated net income 200,000
Less: NCI's share in net income of the subsidiary ( NINIS)
Net income attributale to parent 200,000

2022
Parent
Net income from own operations 250,000
Add (less) amortization of excess
Undervaluation of assets (750000-500000)/5
Consolidated net income 250,000
Less: NCI's share in net income of the subsidiary ( NINIS)
Net income attributale to parent 250,000

Investment in S Company 1/1/2021 1,200,000

Add: Equity in earnings
2021 40,000
2022 56,000
Total 1,296,000
Less: Divideds received
2021 (20000*.80) - 16,000
2022 (30000*.80) - 24,000
Investment in S Company 12/31/2022 1,256,000

* Non-controlling interest 1/1/2021

Add: NCI's share in net income of the subsidiary ( NINIS)
Total
Less: NCI's share in the dividend declared by the subsidiary
 Non-controlling interest 12/31/2021

* Non-controlling interest 1/1/2022

Add: NCI's share in net income of the subsidiary ( NINIS)
Total
Less: NCI's share in the dividend declared by the subsidiary
Non-controlling interest 12/31/2022
Subsidiary Total
100,000 300,000

- 50,000 - 50,000
50,000 250,000
- 10,000 - 10,000 (500000*20%)
40,000 240,000

Subsidiary Total
120,000 370,000

- 50,000 - 50,000
70,000 320,000
- 14,000 - 14,000 (700000*20%)
56,000 306,000

300,000
10,000
310,000
-4000 (20000*.20)
306,000

306,000
14,000
320,000
-6000 (30000*.20)
314,000
Consideration transferred
NCI
Total
Less: Book value of net assets acquired
Excess attributable to patent

Net income from own operations

Add (less) amortization of excess
Undervaluation of assets 150000/10
Upstream Sales
Less: Unrealized profit in ending inventory (UPEI)
Downstream Sales
Less: Unrealized profit in ending inventory (UPEI)
Consolidated net income
Less: NCI's share in net income of the subsidiary ( NINIS)
Net income attributale to parent
 1,300,000
850,000
2,150,000
- 2,000,000
150,000

Parent Subsidiary Total

400,000 225,000 625,000

- 15,000 - 15,000

- 37,500 - 37,500 (100,000*150/400)

(30,000*200/300)
- 20,000 - 20,000 (30,000*200/300)
380,000 172,500 552,500
- 69,000 - 69,000 (172500*40%)
380,000 103,500 483,500
Problem 11

Consolidated Sales
Sales-Parent 3,000,000
Sales-Subsidiary 2,500,000
Total 5,500,000
Less: Intercompany
sales at billed price -500000
Consolidated Sales 5,000,000

Problem 12
Consolidated COGS
COGS-Parent 2,000,000
COGS -Subsidiary 1,300,000
Total 3,300,000
Less: Intercompany
sales at billed price - 500,000
Add: Unrealized profit in ending inventory (UPEI) 100,000
Less:Realized profit in beginning inventory (RPBI) - 45,000
Consolidated COGS 2,855,000

Problem 13
Operating expenses- Parent 600,000
Operating expenses- Subsidiary 400,000
Amortization of excess-equipment 30,000 (300,000/10)
Amortization of gain on sale-building -20000 (100000/5)
Consolidated operating expenses 1,010,000

Problem 14

Building & equipment -Parent 2,450,000

Building & equipment -subsidiary 1,500,000
Total 3,950,000
Undervaluation of equipment 300,000
Amortization of excess - 90,000 (300000/10*3)
Gain on sale of building - 100,000
Amortization of gain on sale-building 40,000 (20000*2)
Building & equipment -consolidated 4,100,000

Problem 15

Unadjusted net income of subsidiary 800,000

Less: Unrealized profit in ending inventory (UPEI) - 100,000
Add:Realized profit in beginning inventory (RPBI) 45,000
Amortization of excess-equipment - 30,000
Adjusted net income of subsidiary 715,000
Controlling rate 90%
Equity in earnings of subsidiary 643,500
Amortization of gain on sale-building (upstream) 20,000
Investment income 663,500
(200000*250/500)
(150000*105/350)
 2022
Parent Subsidiary Total
Net income 5,000,000 1,000,000 6,000,000
Less: Dividend income
(500,000*60%) 300,000 300,000
Net income from own operations 4,700,000 1,000,000 5,700,000
Upstream Sale
Recorded loss on year of sale 50,000 50,000
Amortization of loss/Excess depreciation - 6,250 - 6,250
Downstream Sale
Amortization of gain/Excess depreciatio 100000 100,000
Consolidated net income 4,800,000 1,043,750 5,843,750
Less: NCI's share in NI of the subsidiary - 417,500 - 417,500
Net income attributale to parent 4,800,000 626,250 5,426,250

17
Original depreciation
Upstream 50,000
Downstream 200,000
250,000
18
Downstream (1M*1/5) 200,000
UPstream (500,000*3.5/10) 175,000
Total 375,000
Problem 19
Answer b. P0 and P40,000

Proceeds 100,000
Original cost 60,000
Consolidated 40,000

Problem 20

(1)
Book value 12,000,000
Recoverable amount - 10,000,000
Goodwill 1,200,000
Impairment loss 3,200,000

(2)
Book value 12,000,000
Recoverable amount - 10,000,000
Goodwill 1,000,000
Impairment loss 3,000,000