PROFE03 ACCOUNTING FOR BUSINESS COMBINATIONS

ACTIVITY CHAPTER 4
1. What amount of goodwill is presented in the consolidated statement of financial
position on December 31, 20x1?
a. 40,000 b. 35,000 c. 20,000 d. 15,000
ANS : A. 40 000

2. How much is the consolidated total assets as of December 31, 20x1?

a. 1,867,000 b. 1,907,000 c. 1,958,000 d. 1,974,000
ANS: C. 1,958,000

Other assets, Bass Co. 1 372 000

Other assets, Guitar Co. 496 000
Difference in FV of Building rent 50 000
Goodwill 40 000
Consolidated total assets 1 958 000
3. How much is the non-controlling interest in the net assets of the subsidiary on
December 31, 20x1?
a. 106,500 b. 116,500 c. 136,500 d. 146,500
ANS: 116,500

NCI on acquisition 100,000

Net income of guitar (376,000-320,000) 56,000
Amortization (60,000/6) 10,000
Total 66,000
NCI rate 25% 16,500
NCI as of 12/31/20x1 116,500
4. How much is the consolidated retained earnings on December 31, 20x1?
a. 489,500 b.498,500 c. 534,500 d.543,500
ANS: 489,500

Retained earnings, Bass 440,000

Shared in the net income of Guitar (26,000 x 75%) 49,500
Consolidated retained earnings 489,500
5.  How much is the consolidated total equity on December 31, 20x1?
a. 1,546,000 b.1,564,000 c.1,642,000 d. 1,624,000
ANS: 1,546,000

Share in capital, Bass 940,000

Consolidated retained earnings 489,000
Consolidated total equity 1,546,000