1.

On January 1, 2030, Papa acquired 70% interest of outstanding ordinary shares of Mama Corp by
paying P875,000. On the acquisition date, Mama had ordinary shares amounting to P500,000
and retained earnings of P800,000. The fair value of assets and liabilities of subsidiary were
equal on the date of acquisition except for overvalued inventory of P40,000 and undervalued
furniture of P100,000 with a remaining life of 5 years. The non-controlling interest is measured
at fair value.

On June 30, 2030, Papa sold equipment with a book value of P300,000 to Mama for P250,000.
The equipment is expected to have a remaining useful life of 5 years from the date of sale.

On March 1, 2031 Mama sold machinery for P120,000 with book value of P90,000 to Papa. The
machinery is expected to have a remaining useful life of 5years from the date of sale.

On January 1, 2031, Papa had ordinary shares of P5,000,000 and retained earnings of
P2,000,000, while Mama retained earnings amounted to P1,000,000.

The amount of non-controlling interest in net income 2032:

A. P114,300
B. P115,800
C. P112,800
D. P121,500

How much is the consolidated net income attributable to parent 2032?

A. 1,160,200
B. 1,154,500
C. 1,155,200
D. 1,159,500
How much is the non-controlling interest in net asset in 2031:
E. 511,500
F. 577,500
G. 451,600
H. 517,500
How much is the consolidated net income attributable to parent 2031
I. 1,068,500
J. 1,078,500
K. 1,208,500
L. 1,073,500

2. On January I, 2030, Mitch purchased equipment with an expected useful life of five years. On
January 1,2032, Mitch sold the equipment to Ace and recorded a journal entry in its book:

Cash 85,800

Accumulated Depreciation 35,200

 Equipment 88,000

Gain on Sale of equipment 33,000

Ace has a 60% interest of Mitch voting shares. Mitch reported net income of 99 000, and Ace net
income from its own operations is P187,000 for year 2032. There is no change in the estimated
useful life of the equipment as a result of intercompany sale

In the preparation of consolidated financial, the depreciation expense account shall be:
Credited for P11,000 in the working paper elimination entries

The consolidated net income for 2032? 264,000

The total non-controlling interest in the consolidated income statement for year 2032 will be:
30,800
The total non-controlling interest in the consolidated income statement for year 2032 will be:
30,800

3. Pete Enterprises owns 60% of the outstanding stock of Susie Company, which it purchased for
P50,000 above the underlying book value of P720,000 on December 31, 2028. For the year 2031,
Susie included in its net income P90,000 of unrealized gain on a year-end sale of depreciable
assets to Pete. The NCI of Susie was assigned P12,000 of income in the 2031consolidated
financial statements. The excess allocated to equipment is amortized over 20 years. What is the
net income reported by Susie for 2031? 120,000
4. What is the net income reported by Susie for 2031? 120,000
5. Which one of the following is not a characteristic associated with intercompany transactions?

Transactions between two subsidiaries to be consolidated with the same parent do not need
to be eliminated.

6. Which of the following situations, involving eliminations as part of the consolidation process,
would not have implications for the calculation of non-controlling interest?
The payment of a management fee by the subsidiary to the parent and the sale of inventory by
the parent to the subsidiary.

7. In 2020, Popsie Co. acquired 80% of the voting stock of Sonny Co.in a legal acquisition.
Which one of the following is least likely to be a type of intercompany balance that results from
transactions between Popsie and Sonny during 2020?
Goodwill

8. April Corp. owns 85% of August Corp ordinary shares. On May 1,2029, August sold a machine to
April Corp. for P150,000. The carrying amount of the machine is P110,000 and has a remaining
life of 5 years. How much is the net effect in the computation of consolidated net income
attributable to controlling interest?
34,666 decrease
29,466 decrease
32,000 decrease
27,200 decrease