MQ1.

Name_______________________________
Section______________________________

Instruction: Put a summary of your final answers on the first page of your paper. Show your solution

below. 😊

P1. (1-8) Galaxy Corporation acquired 80% of the outstanding shares of United Company on June 1,
2020 for P3,517,500. United Company’s stockholder’s equity components at the end of this year are
as follows: Ordinary shares, P100 par, P1,500,000, Share premium P675,000 and Retained Earnings
P1,335,000. Non-controlling interest is measured at fair value and the fair value is P705,000. The
assets of United were fairly valued, except for inventories, which are overstated by P66,000, and
equipment, which was understated by P90,000. Remaining useful life of equipment is 4 years.
Stockholder’s equity of Galaxy on January 1, 2020 is composed of Ordinary Shares P4,500,000,
Share premium P1,050,000, Retained Earnings P3,150,000. Goodwill, if any, should be written down
by P85,350 at year-end. Net income for the first year of parent is P450,000 and the net income of
subsidiary from the date of acquisition is P255,000. Dividends declared at the end of the year
amounted to P120,000 and P90,000. During the year, there was no issuance of new ordinary shares.

1. What is the value of NCI at the date of acquisition?

2. How much is the total goodwill?

3. How much is the total consolidated net income?

4. How much is the income attributable to parent?

5. How much is the income attributable to NCI?

6. How much is the non-controlling interest on December 31, 2020?

7. What is the amount of Consolidated Retained Earnings on December 31, 2020?

8. What is the amount of consolidated shareholder’s equity on December 31, 2020?

P2. (9-15) On January 1, 2020, Peru Company paid P900,000 for an 80% interest in Syria Company
at a price of P30,000 less than the underlying book value of 1,200,000. The excess was allocated to
overvalued equipment with a three-year remaining useful life.

The net income of Peru and Syria from their own operations for 2020 are 400,000 and 100,000,
respectively. The dividends declared are 80,000 and 50,000 for both Peru and Syria.

9. What is the value of NCI at the date of acquisition?

10. What is the amount of goodwill/gain on acquisition?

11. How much is the total consolidated net income in December 31, 2020?

12. How much is the net income attributable to parent in December 31, 2020?

13. How much is the net income attributable to NCI in December 31, 2020?

14. What is the value of NCI in December 31, 2020?

15. What is the value of retained earnings in December 31, 2020 if the value in January 1, 2020 is
1,250,000.