Redoble, Shiela Mae S.

Acctg 315 1:30-3:00

PM TTH

Consolidation - Subsequent to date of acquisition

ABC Group
Consolidated Statement of Financial Position
As of December 31, 2021

ASSETS
Cash (23k + 57k) 80,000
Accounts receivable (75k + 22k) 97,000
Inventory (105k + 15k + 0 FVA net) 120,000
Equipment, net (140k + 30k + 10k FVA net) 180,000
Goodwill 3,000
TOTAL ASSETS 480,000

LIABIITIES AND EQUITY

Accounts payable (73k+30k) 103,000
Total liabilities 103,000
Share capital 170,000
Share premium 65,000
Retained earnings 121,200
Owners of parent 356,200
Non-controlling interest 20,800
Total equity 377,000
TOTAL LIABILITIES AND EQUITY 480,000

Solutions:
1.)
FVA, 1/1/2021 Useful life Depreciation FVA, 12/31/2021
Inventory 4,000 N/A 4,000 -
Equipment 12,000 6 years 2,000 10,000
Total 16,000 6,000 10,000

*Inventory assumed to have been sold

XYZ, Inc. Jan.1, 2021 Dec. 31,2021 Net change

Net assets at carrying amount 74,000 94,000
Fair value adjustments 16,000 10,000
Net assets at fair value 90,000 104,000 14,000

2.) Computation of Goodwill

Consideration transferred 75,000
Non-controlling interest in the acquire (90k x 20%) 18,000
Total 93,000
Less: Fair value of net identifiable assets 90,000
Goodwill 3,000

3.) NCI
Subsidiary’s net assets at fair value – 12/31/2021 104,000
Multiply by: NCI percentage 20%
Non-controlling interest in net assets – 12/31/2021 20,800

4.)
ABC Co.’s retained earnings – 12/31/2021 110,000
ABC Co.’s share in net change in subsidiary’s net assets (14k x 80%) 11,200
Consolidated retained earnings – 12/31/2021 121,200

5.)
Profits of ABC Co. and XYZ Inc. (60k + 20k) 80,000
Depreciation of FVA (6,000)
Consolidated profit 74,000

Consolidated profit is attributed to the owners of the parent and NCI:

Owners of parent NCI Consolidated
ABC Co.’s profit before FVA 60,000 N/A 60,000
Share in XYZ Inc.’s profit before FVA
(20k x 80%) & (200k x 20%) 16,000 4,000 20,000
Depreciation of FVA
(6k x 80%) & (6k x 20%) (4,800) (1,200)
(6,000)
Totals 71,200 2,800 74,000