SUBJECT: ACCOUNTING FOR BUSINESS COMBINATIONS

TOPIC: SUBSEQUENT TO ACQUISITION

(WITH SOLUTIONS PO SANA FROM SCRATCH, HINDI KO PO GETS NG SLIGHT IHH SALAMATTT)

1. On January 1, 2019, P Corp purchased 70% of S Corp's P 10 par ordinary share for P 900,000. On this
date, the carrying amount of S Corp's net assets is P 1M. The fair value of S Corp identifiable assets and
liabilities were the same as their carrying amounts except for PPE, which were P 200,000 in excess of
carrying amount. For the year ended December 31, 2019, S Corp and P Corp has net income of P
150,000 and P 200,000, respectively. S Corp paid cash dividends totaling P 90,000. Excess is attributable
to PPE with life of 10 years from Jan 1, 2019. In is Dec 31, 2019 Consolidated FS, non controlling interest
on “partial goodwill basis” (proportionate) should be reported at?

2. On January 1, 2019, B Corp acquired 80% of A Corp's ordinary share for P 280,000 cash. At that date,
A Corp reported Ordinary shares of P 200,000 and RE of P 100,000 and fair value of NCI was P 70,000.
The book values and FV of A Corp's assets and liabilities were equal except for other intangible assets
which had fair value of P 50,000 greater than book value with remaining life of 8 years. A corp reported
the following data for 2019 and 2020:

A. What is the consolidated net income reported in 2019?

B. What is the consolidated net income attributable to Controlling interest in 2019?

C. What is the consolidated net income reported in 2020?

D. What is the consolidated net income attributable to Controlling interest in 2020?