nny SU8NES8 counnon * Se Fey a9 7 50,000,000 cat oe Company scouted 920% ees! Len Ree Company fr 7 hn aheadynan'e eth hneg ance 200080 ordain 0000 co ome Valu pr 2 uy? 2% eles whch tebe ce 20.000 8 et wach es secon eee roam mum of inane, 1 242 The cotton tte ae 8 ‘wer “a0 Reena O@Alt dara ecroe hase arenes Te ie as Compute the good — “eace00. w0.s00 mee Teleperetite maple wate paeut tte ene ee “acsbrup te sect “poe Se Mesnard otha ea own Compa SILT a a of te oe pists ctw ca seat congas rtesoronte genom eco se er Grama 201 Ws Coponton asc a canon cs Fs othe hee ates ores. Spt nce om br conan eaten doh oP pe Vietcong, ns as” Pan — = = Compute fr the good on bargain purchase. (1960,00 0 ~ oe ae Saati caterers tear Imesh at aaa 21M ten Rete Eng eer en het? Teslanets ween |S, Noa Co. acquired 80% sharos of Patricia Co, for 180.000, The FVNA of Parca fs 500.000. Sehelmenanl one rns ete eae Sout e oan seco pme pruaaoo prise cewae ae aaa Sipanbuen poe ain Fated ces ‘ign san roan sain sro nen chs Cengeyn ales eemsion. ey acer been —ezraan © Sie tontg coda ate ast ann tareie eset? 1 Stat amo tanya a, Wn etn our en £ Seniinggtenony SP ikemeroe wsaaca psenon 5 Sectcan ‘Toto css aca sat ect carmen Sk So eee errs 2, Tama Company eqn 7% se atan Pa company 1.75080. Theaeusn tpaihcmtanitiameserareeezsrer reo Non controling interest net assets as of nary 1, 2020 oe eaatrenaniar a ee Cash 545.000 a | 7 ae Sete rereemiroerereeneateies tae ae user a ete ‘Whats the fir wehue ofthe bucing? The ae nhonthe naa or te conta pucoce Pa bane. Thc sibacobgecee iaeigbetarenton nea458 tery . Using the same information in Nos, 94 and 98, compute the Consolidateg Retained Earning, December 31, 2011: a. P64,760 c. P69,400 b. 65,090 d. 69,800 . Using the same information in Nos, 94 and 98, compute the Equity Holders of Parent ~ Retained Earnings, December 31, 2011. a. P64,760 c. P69,400 b. 65,090 d. 69,800 . Using the same information in Nos. 94 and 98, compute the Consolidated Total Equity (Stockholders' Equity) on December 31, 2011. a. —P108,090 c. P312,700 b. 300,690 d. 317,410Gonslidted Financial Staements-Stockdequisiion AS? In addition to the information in NO. 94, assuming that si. 9% on the following results were given: ling that on December Dividends Net Paid Income Parent Company ern 15,000 P3020 Subsidiary Company ... 4000 9,400 Using cost method te record results of operations, compute the investment balance on December 31, 2011: a. Po -0- © P122,160 b. 120,600 ad 125,460 99. Using the same information in Nos. 94 and 98, compute Dividend Income for 2011 using cost method: a. PO P4000 b. 3.600 d. 8,400 100. Using the same information in Nos. 94 and 98, compute the Non-controling Interest in Net Income on December 31, 2011: a. PO cc. P6I0 b. 540 d. 940 101. Using the same information in Nos. 94 and 98, compute the Non-controliing Interests on December 31, 2011: 9. 10,600 c. P12010 b. 11,140 d. 12,300 102. Using the same information in Nos, 94 and 98, compute the Profit for the period attributable to Equity Holders of Parent on December 31, 2011: a. P26,600 ©. P36,000 b. 32,090 d. 44,100 103, Using the same information in Nos, 94 and 98, compute the Consolidated/ Group Net Income on December 31, 2011: a. P26,600 ce. P32700 b. 32070 dé. 44,100456, abilities and stockholders’ equilY Fe ocount Payable... 4s ation noe jonds payable, 10%...... 0 Semen) ok P10 por . Eom onal poidin cop. fate Retained eamings cere 24 ‘ond stocanotden' ecuity F267000 12.400 At the date of acquisition, ol osets ond fabiltes of Subsidiary Company have book valve approximately equal fo thelr respective market valves except the following as determined by appraisal as follows: Total liabitt Inventories (FIFO method) eure P17.100 Equipment (net — remaining lite ~ 4 y°5.) 48,000, Oe 13,000, Patents (remaining lite 10 yrs) . Goodwil no impairment) ‘Compute the amount of partial goodwill on January 1, 2011 2. P2,600 ©. P14,400 b. 3800 d. 25,200 95. Using the same information in No. 94, compute the non-controlling interests net assets) on January 1, 2011. o. P1000 P1800 b. 11,200 a 13090 96. Using the same information in No. 94, compute the Consolidated Retained Eamings, January 1, 2011: a. P48,000 © PB4900 b. 52,100 489,000 97. Using the same information in No. 94. comput ; s perained Earnings, January 1.2011: 'e the Equity Holders of Parent o. rg000 « & Pehos a 3m42. Z, a resident citizen, died leaving in 2018 the following: Net estate (before standard deduction): Philippines P5,000,000 USA 3,000,000 Australia 2,000,000 Estate tax paid: USA 30,000 Australia 220,000 Determine the estate tax due after tax credit.P3.11. Juan died leaving a gross estate of P12,800,000 including a land inherited from his uncle 3 ¥% years before his death and a car donated to him seven (7) years before his death. The following data pertain to the two properties: Unpaid Mortgage FMV upon receipt FMV upon death Land P100,000 P1,800,000 P1,250,000 Car 50,000 300,000 400,000 The decedent was able to pay % of the unpaid mortgage on the land before his death. Other deductions claimed are as follows: Expenses, losses, indebtedness, taxes P 1,200,000 (excluding the unpaid mortgages above but including actual funeral expenses of P300,000 and medical expenses of P600,000) Standard Deductions; 1,500,000 Transfer to the Govt, included above 300,000 Death Benefits from Employer under RA 4917 200,000 Family home (included above) 2,000,000 REQUIRED: Determine the net following: 1. Vanishing deductions 2. The net taxable estatePROBLEMS: 3.1. (LOSSES) Various types of losses incurred by a decedenvestate as follows: Loss due fo typhoon, a day before the decedent's death, P1,000,000 po00 000,” SNwTECK: two (2) months alter the decedent's death Robbery loss, eight (8) m . Robbery, 088, eight (8) months afer the decedents. death, ‘Swindlig loss incurred 2 months before death, 800,000 Gambling losses before death, P2,250,000 REQUIRED: Question #1: How much is the deductible “losses” from the gross estate of the decedent? Question #2: How much is the deductible “losses” from the gross estate of the decedent assuming the robbery loss was incurred 1 % years alter the decedent's death? 3.2, (CLAIMS AGAINST THE ESTATE / INDEBTEDNESS, CAIP, etc.) The heirs of a resident citizen decedent with a total gross estate of 15,000,000 provided the following data Receivable from Juan, a debtor 500,000 ‘Amount collectible from Juan 400,000, Unpaid taxes on the estate before death 150,000 Unpaid taxes on the estate after death 50,000 Unpaid mortgage on the estate 200,000 Funeral expenses (paid) 182,000 Unpaid funeral expenses 37.500 Unpaid medical expenses 82,000 Judicial expenses 100,000 Unpaid loans arising from debt instruments (notarized) 125,000 Unpaid toans arising from debt instruments (not 75,000 notarized). The debt instrument was issued by a financial institution not requiring notarizations for debt instruments issued Unpaid loans arising from debt instruments (not 100,000 notarized). The debt instrument was issued by a non- financial institution not requiring notarizations for debt instruments issued Casualty toss 88.0001 Frince charming Corporation sequela the asses and aetume a abilities of Princess Corporation. The bformaton below summarizes the fnanial poston of Princess Corp and Prince Charming Corp Princes Prince Ourming Carryog Amount FalrValue GaryingAmount Fal Value con 2500,000 11,900,000 ventory 200000 2500000 -4900,000 300,000 Ezulpment ‘3020,000 200,000 5,000,000 ‘4900.00, Bulag '3300,000 ‘4000000 3,000,000 2,200,000 tana p2o,000 000900 12,000,000 szpeo.000 SGooewit ‘1p20.000 500.000 Patent 500.200 600,000 saop00 ‘0200 ‘Accounts payable 2300000 2300000 +200,000 800,000 Bonds Payable 3200000 3,500,000 1,000,000 41200,000 StareholdersEquily 13,700,000 28,000,000 ‘The purchase price composed of Cash 1000.00, Ord ary Shares wth ti vue of 2,800,000, ane a 3year Bons Payable wth aface amount ofS 600,000. The bonds payable wae dacountad to earn 12% anrual interest Prince Charming neurred the folowing costin competing he ison Cost of ting bones sa000 Legal oes 100,000 Finder tees 50,000 Professona Fees 100,00 (ost of sung stares 20000 Compe forthe Far Vue ofthe Net Assets qed (PVN). Compute forte wots Consideration Transteed. «:Comaute for the goodw/gan on zargainautchase on the sald transaction. {Determine the aroun of attets and Fable afer the busines combination. 2.0m lnuary 1, 2003, P Corp, sequired 70% ordinary shares ofS Crp. the Fair Value of the Net Asets acquired is $20,200, Comte othe Gos I/Gain on Bargain Purchat under the flowing eas: ‘a Theconsieration transfered x 400/00 cash The ar value of the Non-cortrling interests 20,000, bh Tre consideration vansteved I 40,000 cash. The NCIis measured using helgled Fal Value metiod. «Theconserationtranseed is 400,000 xan, The NCIis measured use the proportionate share in RMA (dT contderalion Yranferred 200,000 al the Far vale of the NOs 130,008, ‘2 Theconsieration transfered Is 200,000 and the NC Is measured using the implied FlrValue method. ‘The consideration transferred 300,000 cas plusacont- premium of 100,000. The NCIis measured using tre Implied FV method. 30> lary 3, 2023 Day Shark aquired Mormy Shark Cor 40% orcnary shares for 60,000 which the fa salue at thattime. The Investment does not resulta conval hence, the livestment is clasifed as Investment ‘trough FYPL. On June 30,2023, Day Shark acces! a a6 ona 30% interest in Mommy Shar oe 500,000 the ‘ive at at ie. The Far Valu ofthe net assets acquted 000,000 whe te NCI measured at al Value 4 400,000.Costncurad related to busines combination i 30,000. 2, Compute the gooswilesin from busress combination b.comput forthe net amount tobe recognized in rotor ass “Succssis achieved not by doing ony what Is comfortobleand convenient. Sucesss bul by dolng what must be one to reach2.0m June 33,2023 Mack Corporation sequled 70% leterest on Mow Corpraton. The information below ‘summaizs the final potion of Mrown Cxp and Mack Corp atthe date of acqultn, tack Mowe Carrying Amount Fal Value carrying Amount Fair Value cash 7,000,000 500.000 Inventory 2,300,000, 2,500,000 000,000 3,800,000 Eauipment 3000.00, 2500,000, 600.000 “4002000 uiding 4300.00, ‘000.000 3.000.000 2.700.000 ans 000.000 900.000, 22000000 2.500.000 Goodall 3,000,000 00.000 arent son.000 00.000 00.000 309.000 Accounts payable 2300000 2300000 2800.00 2800.00 fonds Payatle 300,000 3.100.000 5000.000 000.000 COrdioay Shares 2300000 3,000,000 Share Premium $00,000 24500.000 4.800.000 Retained Earrings 35,400,000 “The purchate pices eamposed of Cah §,000000 and par vlue of PS per share. The CIs measured at fa value ‘completing te acauli 20,000 Ordinary Shares wth afr value of 2,000,000 and of 2.000000 Mick incur the flowing est In gl fees 100.000 Finder's tees 000 Proessona Fees 100.000 Cost of suing shares e000 Mrown fom acquis date 1908 31,2023 ara follows: ine Moun +30900,000 15,000,000 “The Income and Expenses of ck ana sates Cost of sales 421500.0010,00,000 Operating expenses ‘000000 3500000 ‘00000 500.000 ‘Other income inclasing dividend income Many ood hinrees tor P590,000 Ths was not included inthe perting pense et. OMends declared during Seer nt 300 000 and 2.200000 by Mlck ad Mrown resgecive Th ering ut Mea the cesfencentyens, Sling 10 yeas, and Patent ~ 5 year Te lnventory svalvedatFFOmathod Farrer the Good or Galn atibutable to Mlack ang Mrown respect J Compute or the Concerted amount of cash at he cate of seaistion a reine tor the Consliated aroun of inventory atthe date of Acqusion a cert forthe Conoldnted Armour® Net Income atrbutabe to Mack and Mrown eect Foot forthe Congolgated amount of Inventor at Dee 3.2023, F Cempute tor the Cnsciated amount of Euipment at Ore 31.2083 e crmpare forthe Conscikated amount of uling st Dec 31.2023 seer forthe Conslsted amount of anda Dec 32.2028 Compt forthe Consléted amount of Ordinary shares t Ox. 31,2023. arate torte Conslated amount of Share Premium at es 312023 2 care orth onelated amount of etned aring a Oe. 312073 2 con forte Coca amour of onConraig interest Oe 2.2023, 22 Com orth orshdated amour of trends Egy a Ot. 31.20% 23. comp lore Conated aout of Operating pera Or, 31.2031.On June 31,2023 Mlack Corporation acquired 70% interest on Mrown Corporation. The information below ‘summarizes the financial position of Wrown Corp and Miack Corp at the dat of acquisition, Mack Mrown Ccanying Amount Far Value Carrying Amount Fair Value cash 7900000, 500.000 Inventory 2.800000, 2500000 4900.00, 300.000 Equipe 3.000000, 3.500000, 3,500,000, ‘400,000, Bulging 44300000, ‘4000000, 3000000, 2.700.000, Lana 500.000, 6000000 000,000, 2500,000, Good 7,000,000 500000 Patent 00,000 600,00 00,000 300.000 ‘Accounts payable 2300,000 2300000 2.800.000 800,000 Bonds Payable 33100000 ‘3,100.00 5000000 000,000 Ordinary Shares 23200000 1,900.00 ‘Share Premium 00,000 3.500.000 Retained Eomings 15,400.00, 1,800,000 ‘The purchase price is composed of Cash 4,000,000 ané 200,000 Ordinary Shares with a fa value of 'P2000,000 and a par valu of PS per share. The NClis measured at fir value of 000,000. Mlack incurred the folowing cost in completing the aequation: Legal fees 100.000 Finder's fe 5090 Professional Fees 100,000 Cost of issuing chares 20,000 ‘The income and Expenses of Mlack and Mrown trom acquisition date to Dec 31,2023 ee s follows: Mack Mrown Seles 20000000 15000000 Costof sales 3.500.000 10,000,000 Operating expenses ‘3000000 3.800.000 Other income ineluding diidend income any "2900.00 $00,000 ‘Goodwil's impaied for PS00,000. Ths was not inclided inthe operating expenses yt. Dividends declared «during the year amounts to 3,000,000 and 2,000,000 by Mlack and Mrown respective, The remaining useful le ofthe Equipment 4 years, Buiding = 10 years, and Patent ~ 5 years. The inventory is valued at FIFO method 1. Compute for the Gaadwl or Gain attibutable ta Mack and Mrown respectively 2. Compute forthe Consolidated amount of eash atthe date of accusition '3, Compute forthe Consolidated amount of inventory atthe date of Acqushion 4. Compute forthe Consolidated Amount Net Income attributable to Mlack and Mrown respectively. 5. Compute for the Consolidated amount of Inventory at Dec. 31,2023. 6. Compute forthe Consolidated amount of Equipment at De. 31,2022, 7. Compute forthe Consolidated amount of Building at Dee. 31,2023, 8. Compute forthe Consolidated emount of Lend et Dec. 31,2023, 8, Compute forthe Consolidated amount of Ordinary shares st Dec. 31,2023, 10. Compute or the Consolidated amount of Share Premium at Dec. 312023, 11. Compute forthe Consolidated amount of Retained Eamings at Dec. 31,2023, 12 Compute for the Consolidated amount of Nor-Contotng Interest at Dac. 31,2073 18, Compute forthe Consolidated amount of Shareholde's Equity at Dec. 31,2023. 14 Compute for the Consolidated amaunt of Operating Expense at Dec. 312023.94. On January 1, 2011, Parent Company acquired 90% of Subsidiary Company in exchange for 5,400 shares of P10 par common stock having a market value of P120,600. Parent and Subsidiary condensed balance sheets were as follows: Parent Company and Subsidiary Company Balance Sheets at January 1, 2011 (before combination) Parent — Subsidiary Company Company Assets Cash. P 30,900 P 37,400 Accounts receivable (net) .. 34,200 9,100 Inventories .... 22,900 16,100. Equipment (net) Patents ... Total assets| Shige he 8 Vwhecanpo gM vanes cousnaron ‘Se secp ha 0 es wc en edb we ‘hn 3 w mn 2 Tern nord en wT Sanam gest 11,00 620 Servaue oan boo sae ereame erg cerage a aster p oa sooarae ioomrenreee eee = TES ee sccounrncovane no he ttn me nt00 sexo a0 yemaneg ae ait co pee Proseoo prio rou see ‘coe sno ones rasan Paria, neon) be acne ye ong te vl ct your tenes sotoe Pag sno ¢ o00s [piianoc Phnom Pro cooe Piso00 SERRE wosmerame Sect acanai mat Sng rg 000 ro Ps ‘Shger etree contin ow con Boa imam “moe waco sre - Soc won sa Sure hrenon 000 ‘ao ened res u Commas 00 Gewese M000 Sotemae 50000 tanec Eurvgs nieces bore he? cf 14, Ryoncargan act eninge! nC Company alagaacgtton MED [couny clove prtn ony mab sooo? Sete ce rat nean Sock 1. Taras Conan scutes 70% sara of Latan Pe congay 178200. The sein ‘meats apeanu cio om Teracvauectie eet of awn Pia congas oe ‘Swng esr see Biking ee (eve ar eee ct arg TNS, 0O0 The nt we henge oe se necon a hed {Test anen cere’ pcs an Sot ae such eee48.Me A Filipino, mare to 8 wit whom hha ro een died onFebrary 1,218. The veto ‘ofthe properties fe spouses show te felling 4 Howe nda in Mania own by A bef te mariage 500.000 1 Agata! td owned by Before the mange ‘200.00 _Realprpery sued dureg arg 200.000 4 Fay be scquied during marrage 20000 5 Penonal propery saied ding maings Taone60 E oper n Maa beri hy A ding mariage om i her tno dedon Feb 14, 947 22000000 1 Aparient howe inked by B drag mariage from bet mother eh ded on Febuary 2003 00.00 1. Prcwes of surance wr he exe A wat 1 he reveal terefcat scioat 1900900 4 Proceds oife insurance where B was designe athe ievocateDeneficiry 7000900, Deduction claimed by the este: ‘Devise given vou of Philpine goverment indecent wil P300000, i 2 Chim gait he eae 100.000 53. Unpaid mortgage oe spicular lind (ter b above) 400.000 er expences {0.00 3. Jada expenses 00,200 Determine he ext x ad payable 49. Alii, mare, die on agar 2018, svn he lowing: Fay Home 1.300.000 3 Caohand ote ropries 230000 © Berefiy under RA 817 Fo00.000 Orin deductions for expense. ones and tee (ELIT) “rong00 Deven the net arable xe of A 50.Mé ©, Filipino, marie, ded on Aus 1, 2018, ace yar afl is mariage to MeO. He ef he Tobowing ‘a Dopey nbested by MeO from his ahr who ed February 14,2013, 300.000 1S Proper inher by Mia O fom er ater who ed Febery 1a, 2014 1200000 «Propet ibered by MeO from isnt whe ded Fetray 13,2015. 1'ac0000 ‘&ropenytherted by MexO fom ber mtr wo died Febrsy 142016 10.000 ‘© Property aeuired th the abr of MeO. 22000000 Mrs 0 130,000 Me & Mis 0 (lily bom) 2ona00 One penton! pope en.000 rena Detucson chimed y th ee ter expe ero 8 Unpad merses on propery ees a sto 'y 300000 e 180000 & 200080 Chins agains he ese 170000 Accrued tes (before the death of Me) ‘0000 ‘termine tenet axable esate assuming 1. Conjugal partnership of gait 2. Absolte community of property65. On January 2, 2015, Andrew inherited a commercial building which was valued at P30,000,000 in the estate tax return of his predecessor. This is the only property that remained when Andrew died on July 7, 2018. The property was encumbered by a P'12,000,000 mortgage. Andrew was able to pay 6,500,000 of this before his death. The property has a zonal of P40,000,000 and appraisal value of P50,000,000 upon his death. Required: a. Compute the vanishing deduction. b. Compute the estate tax.62. On October 31, 2016, the decedent borrowed.a P2,000,000 from a lender which charges 10% interest due annually every October 31. The decedent died on January 31, 2018. Compute the total deductible indebtedness against gross estate. a. P2,250,000 . P 2,050,000 b. P2,200,000 4. P 2,000,00063. The following obligations rertained unpaid before estate tax returns were about to be filed: Unpaid funeral expenses P 250,000 Unpaid judicial expenses 400,000 Unpaid medical’expense 200,000 Real property tax (3/4 unpaid before death) 80,000 Unpaid bank loan: ~ Balance at date of death 150,000 ~ Balance before filing of return 120,000 Compute the deductible indebtedness.3. Compute mir. 4 5 taxanie estate. 61. The decedent had P 20,000,000 cash in his bank account in his latest SALN. P2,000,000 of this were spent for his hospitalization prior to his death. His family withdrew P1,500,000 of this for his funeral. The same were subjected to 6% final tax by the bank. How much cash shall be reflected in the gross estate of the decedent?35. A decedent left the following properties: Land in Italy (with PIM unpaid morigage) 2,000,000 Land in Laguna, Philippines 500,000 Franchise in USA 100,000 {Receivable from debtor in Philippines 70,000 Receivable from debtor in USA 100,000 Bank deposits in USA 80,000 Shares of stocks of PLDT, Philippines 75,000 ‘Shares of stock of ABC, foreign corporation, 75% of the business in the Philippines 125,000 Other personal properties 300,000 Zonal value of te and in Laguna =I 750,000 If the decedent is a non-resident citizen, his gross estate is a. P3,680,000 bd. 3,600,000 ¢. 2,500,000 d. P2,650.000 36. Using the above data, if the decedent is a non-resident alien, his gross estate is a. PI.195.000 b. P945,000 c. P1,320.000 d, P1,070.000Based on the above problem but assuming that the PLDT shares of stocks are not listed in the local stock exchange, and there are 1,000 shares at the time of death, the company’s outstanding shares were 10,000 shares. Its retained earnings was P2,000,000, par value per share was P50. The gross estate should show the said shares atA made the following transfers inter-vivos: ToB ToC ToD ToE Cost P 100,000 P 100,000 P100,000 P 100,000 FMV, time of transfer 140,000 100,000 100,000 80,000 Consideration received 100,000 140,000 80,000 10,000 FMV time of death of A 120,000 200,000 70,000 90,000 The amount to be included in the gross estate of A isRecognition and measurement of the identifiable assets acquired and liabilities Mich acquires assets and liabilities of Ton Company on January 20. To obtain these shares, Mich pays P400,000 and issues 10,000 shares of P20 par value ordinary shares on this date. Mich’s stock had a fair value of P36 per share on that date. Mich also pays 15,000 to a local investment firm for arranging the transaction. An additional P10,000 was paid by Mich in share issuance costs. The book values for both Mich and Ton as of January 20, 2020 are presented below. The fair value of each of Mich and Ton accounts is also included. In addition, Ton holds a fully amortized trademark that still retains a P40,000 value. ‘Ton Company Mich, Inc. Book Value Fair Value Cash P_900,000 P_80,000 P_ 80,000 Receivables 480,000 180,000 160,000 Inventory 660,000 260,000 300,000 Land 300,000 120,000, 130,000 Buildings (net) 1,200,000 220,000 280,000 Equipment (net) 360,000 100,000 75,000 Accounts payable 480,000 60,000 60,000 Long-term liabilities 1,140,000 340,000 300,000 Ordinary shares 1,200,000 80,000 Retained earnings 1,080 480,000 Assuming the combination is accounted for as an acquisition, immediately after the acquisition, in the Statement of Financial Position of Mich: