Problem 1.

On January 1, 2014, Park Corporation and Strand Corporation and their condensed
balance sheet are as follows:
Current Assets
Non-Current Assets
Total Assets
Current Liabilities
Long term debt
Stockholders equity
Total Liabilities and Equities

Park Corp
70,000
90,000
160,000
30,000
50,000
80,000
160,000

Strand Corp
20,000
40,000
60,000
10,000
50,000
60,000

On January 2, 2014, Park Corporation borrowed P60,000 and used the proceeds to obtain 80%
of the outstanding common shares of Strand Corporation. The acquisition price was considered
proportionate to Strands fair value. The P60,000 debt is payable in 10 equal annual principal
payments, plus interest, beginning December 31, 2014. The excess fair value of the investment
over the underlying book value of the acquired net assets is allocated to inventory (60%) and to
goodwill (40%).
On a consolidated balance sheet as of January 2, 2014, what should be the amount for each of
the following?
1. The amount of goodwill using proportionate basis (partial)
a. P0
c. P 10,000
b. P 8,000
d. P 20,000
2. The amount of goodwill using full fair value (fully/gross-up) basis:
a. P0
c. P 10,000
b. P 8,000
d. P 20,000
3. Current assets should be
a. P105,000
c. P100,000
b. P102,000
d. P 90,000
4. Non-current asset using proportionate basis (partial) in computing goodwill should be:
a. P130,000
c. P138,000
b. P134,000
d. P140,000
5. Non-current assets using full fair value basis (full/gross-up) in computing goodwill should
be
a. P130,000
c. P138,000
b. P134,000
d. P140,000
6. Current liabilities should be
a. P50,000
c. P40,000
b. P46,000
d. P30,000
7. Non-current liabilities should be
a. P110,000
c. P90,000
b. P104,000
d. P50,000
8. Stockholders equity using proportionate (partial goodwill) basis of determine noncontrolling interests should be
a. P80,000
c. P95,000
b. P93,000
d. P130,000
9. Stockholders equity using full fair value (full/gross-up goodwill) proportionate basis of
determine non-controlling interest should be:
a. P80,000
c. P95,000
b. P93,000
d. P130,000

Problem 2.
On January 1, 2014, 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 on January 1, 2014 were as follows:
Assets
Cash
Accounts Receivable, net
Inventories
Equipment, net
Patents
Total assets
Liabilities and Equities
Accounts Payable
Bonds Payable
Common Stock, P10 par
Additional paid-in capital
Retained Earnings
Total Liabilities and Equities

Parent Company
30,900
34,200
22,900
179,000
267,000

Subsidiary Company
37,400
9,100
16,100
40,000
10,000
112,600

4,000
100,000
100,000
15,000
48,000
267,000

6,600
50,000
15,000
41,000
112,600

At the date of acquisition, all assets and liabilities of Subsidiary Company have book value
approximately equal to their respective market values except the following as determined by
appraisal as follows
Inventory (FIFO method)
P17,100
Equipment (net-remaining life 4 years)
48,000
Patents (remaining life 10 years)
13,000
Using the proportionate basis or partial goodwill method, compute the following:
1. The amount of goodwill on January 1, 2014
a. P2,600
c. P14,400
b. P3,800
d. P25,200
2. The non-controlling interest on January 10, 2014:
a. P10,600
c. P11,800
b. P11,200
d. 13,090
3. The consolidated retained earnings on January 1, 2014:
a. P48,000
c. P84,900
b. P52,100
d. P89,000
4. The equity holders of parent (or controlling interest)-retained earnings on January 1,
2014:
a. P48,000
c. P84,900
b. P52,100
d. P89,000
5. For the year-ended December 31, 2014, the following results were given:
Dividends Paid
Net Income
Parent Company
P15,000
P30,200
Subsidiary Company
4,000
9,400
The investment balance on December 31, 2014:
a. P0
c. P122,160
b. P 120,600
d. P125,460
6. Using the same information in No.5, compute the Dividend Income for 2014:
a. P0
b. P3,600
c. P4,000
d. P8,400
7. Using the same info in No. 5, the non-controlling interest in net income on December 31,
2014

a. P0
b. P540
c. P610
d. P940
8. Using the same info in No.5, the non-controlling interest on December 31, 2014:
a. P10,600
b. P11,140
c. P12,010
d. P12,300
9. Using the same info in No.5, the profit attributable to equity holders of parent (or noncontrolling interest on the net income) on December 31, 2014:
a. P26,600
b. P32,090
c. P36,000
d. P44,100
10. Using the same info in No.5, the consolidated/Group net income on December 31, 2014:
a. P26,600
b. P32,090
c. P32,700
d. P44,100
11. Using the same info in No.5, the consolidated retained earnings on December 31, 2014:
a. P64,760
b. P65,090
c. P69,400
d. P69,800
12. Using the same information in No.5, the equity holders of parent (or controlling interest)
retained earnings on December 31, 2014:
a. P64,760
b. P65,090
c. P69,400
d. P69,800
13. Using the info in No. 5, the consolidated total equity on December 31, 2014:
a. P108,090
b. P300,690
c. P312,700
d. P317,410
Problem 3.
On January 2, 2014, P Company purchased 75% of SS Companys outstanding
common stock. Selected balance sheet data at December 31, 2013 is as follows:
Total Assets

P Company
P 420,000

S Company
P 180,900

Liabilities
Common stock
Retained Earnings
Total Liabilities & SHE

P 120,000
100,000
200,000
P 420,000

P 60,000
50,000
70,000
P 180,000

During 2014, P Company and S Company paid cash dividends of P25,000 and P5,000,
respectively, to their shareholders. There were no other inter-company transactions.
1. In its December 31, 2014 consolidated statement changes in equity, what amount should
P Company report as dividends paid?
a. P5,000
b. P25,000
c. P26,250
d. P30,000
2. In its December 31, 2014, the Parents (Interest/Equity Holders/ Controlling interest) in
the consolidated balance sheet, what amount should P Company report as dividends
paid?
a. P5,000
b. P25,000
c. P26,250
d. P30,000
3. In its December 31, 2014, consolidated statement changes in equity, what amount
should be reported as common stock?
a. P50,000
b. P100,000
c. P112,500
d. P150,000
4. In its December 31, 2014, the Parents (Interest/Equity Holders/ Controlling interest) in
the consolidated statement of changes in equity or in the consolidated balance sheet,
what amount should P Company report as common stock?
a. P50,000
b. P100,000
c. P112,500
d. P150,000
5. On December 31, 2014, what amount should be reported as non-controlling interest in
net assets?
a. P0
b. P30,000
c. P45,000
d. P105,000