Zenaida Solutions To Exercises Chap 14 15 Incomplete

CHAPTER 14
1. a)Outstanding shares (P1,000,000/P100)= 10,000 shares.
% of ownership=10,000/10,000=100%
Investment Cost
Subsidiary Interest
Gain from Bargain Purchase
P1,500,000
(1,550,000)
P( 50,000)
Investment Entry in Textbook Books:

Investment in Viewpoint
Cash
1,500,000
1,500,000
Share Capital, Viewpoint

Share Premium, Viewpoint
Retained Earnings, Viewpoint
Gain on Bargain Purchase
1,000,000
250,000
300,000
1,500,000
50,000
b) % of Interest: 9,000 / 12,000 = 75%

Table for Det and Alloc of Excess:
Investment Cost/Implied Value
Subsidiary Interest
Goodwill
Cash
100%
P1,600,000
1,425,000
P 175,000
75%
P1,200,000
(1,068,750)
P 131,250
25%
400,000
356,250
P43,750
1,200,000
1,200,000
Goodwill
Retained Earnings
Share of NCI in Goodwill
175,000
900,000
243,750

Retained Earnings
Non Controlling Interest
300,000
81,250
43,750
75,000
1,200,000
43,750
25,000
400,000
c) % of Interest: 7,500 / 10,000 = 75%

Table for Det and Alloc of Excess:
Investment Cost/Implied Value
Subsidiary Interest
Gain
100%
P1,230,000
1,320,000
P 90,000
Cash
900,000
900,000

Gain on bargain purchase
750,000
150,000
90,000

250,000
50,000
30,000
2. a) Percent of ownership 8,000/10,000= 80%

Total
Consideration & Implied Value 162,500
Subsidiary Interest
150,000
Excess as asset revaluation
12,500
75%
P900,000
990,000)
P 90,000
900,000
90,000
330,000
80%
130,000
120,000
10,000
20%
32,500
30,000
2,500
25%
330,000
330,000
0
Investment Entry:
Investment in Sol
Business Combination Expenses
Cash
Working Paper Entries:
Share Capital, Sol
Retained Earnings
Plant & Equipment
Investment in Stocks
Share of NCI in Asset Rev
130,000
30,000
160,000
40,000
80,000
12,500
130,000
2,500
Share Capital, Sol

Retained Earnings
Share of NCI in Asset Rev
NCI
10,000
20,000
2,500
32,500
Consolidated Statement:
Plant and Equipment
Shareholders Equity: Share Capital
Share Premium
Retained Earnings (-30,000)
Non-Controlling Interest
b)
P562,500
500,000
170,000
170,000
32,500
% of interest= 9,000/10,000= 90%

Investment Entry:
Investment in S Co.
Share Capital
Share Premium
125,000
100,000
25,000
Share Premium
Cash
Table:
20,000
20,000
100%
138,889
150,000
11,111
Investment Cost and Implied Value

Subsidiary Interest
Gain
Working Paper entries:

Share Capital
Retained Earnings
Share of NCI in Gain
Gain
90%
P125,000
135,000
P 10,000
10%
13.889
15,000
1.111
45,000
90,000
1,111
125,000
11,111
Share Capital
Retained Earnings
Share of NCI
NCI
45,000
90,000
1,111
13,889
Consolidated:
Plant & Equipment
Shareholders Equity: Share Capital
Share Premium
Retained Earnings
NCI
P550,000
600,000
180,000
200,000
13,889
994,444
3. Table for determination and allocation of excess.
Investment In Stocks 115,500
Case A
85%
102,000
15%
13,500
B
100%
125,000
80% *
100,000
20%
P
25,000
Equity over S Co.
80,000
68,000
12,000
80,000
64,000
Excess of Cost
35,500
34,000
1,500
45,000
36,000
Adjustment
30,000
25,500
4,500
30,000
24,000
Goodwill (Gain)
5,500
(3,000)
15,000
12,000
16,000
9,000
6,000
8,500
3,000
*2,400/3,000= 80%
Inventory
Long Term
Plant & Equipment
Patents
Goodwill
FMV
P40,000
15,000
20,000
12,000
Cost
P30,000
12,000
11,000
4,000
Difference
P10,000
3,000
9,000
8,000
30,000
a) Investment Entry:
Investment in S Co.
Cash
Adjustment and Elimination Entry:
Share Capital
Retained Earnings
Inventory
Long Term
Plant & Equipt
Patents
Goodwill
102,000
20,000
122,000
30,000
50,000
10,000
3,000
9,000
8,000
5,500
102,000
13,500
NCI
b) Investment Entry:
Investment In Stocks
Share Capital
Share Premium
Share Premium
Cash
Adjustment & Elimination Entries:
Share Capital
Retained Earnings (63) 80%
Inventory
Long Term Investment
Plant & Equipment
Patents
Goodwill
Share of NCI in Asset Rev and GW
Share Capital
Retained Earnings
Share of NCI in Asset Rev and GW
100,00
50,000
50,000
20,000
15,000
35,000
24,000
40,000
10,000
3,000
9,000
8,000
15,000
100,000
9,000
6,000
10,000
9,000
25.000
CHAPTER 15
1&2.
Book of Paradise
Year 1
Equity Method
Investment in Seashore
Cash
26,000,000
800,000
26,000,000
Cost Method
Cash
No entry.
26,000,000
26,000,000
Income over Subsidiary

Cash
Investment Balance
Year 2
Cash
800,000
480,000
480,000
26,320,000
400,000
480,000
Investment Balance
26,000,000
480,000
No entry
400,000
480,000
480,000
Investment Balance
26,240,000
Working paper adjustment and

Year 1
Dividend, Seashore
Elimination
Share Capital , Seashore

Retained Earnings, Seashore
Goodwill
16,000,000
8,000,000
2,500,000
Share Capital, Seashore

4,000,000
2,000,000
500,000
Year 2
Dividends, Seashore
Cash
Dividend Income
Cash
Dividend Income
480,000
Investment Balance
26,000,000
480,000
entries:
800,000
480,000
320,000
Dividend Income
Dividend, Seashore
480,000
480,000
Same Entry
26,000,000
500,000
Same Entry
6,500,000
400,000
80,000
Dividend Income
Dividends, Seashore
480,000
Retained Earnings
(700000-480000)
320,000
480,000
480,000

(10400000x80%)
Goodwill
16,000,000
8,320,000

4,000,000
2,080,000
500,000
Same entry
2,500,000
26,320,000
500,000
Same Entry
6,580,000
320,000
3.
Davao Co., & Subsidiary Cebu Co.

Working Paper for Consolidation
For the year ended Dec. 31, 2010
NCI
Davao
Income Statement
Sales
Inventory, Jan. 1
Purchases
Inventory, Dec. 31
Cost of Sales
Gross profit
Expenses
Net Income from Operation
Dividend Income
Net Income
Consolidated Net Income
Share of NCI
NI to Retained Earnings
1,050,000
150,000
900,000
( 200,000)
850,000
200,000
100,000
100,000
30,000
130,000
_______
130,000
Statement of Retained
Earnings
Balance, Jan. 1:
Davao
Cebu
Net Income forwarded
Total
Dividends, D Co.
C Co.
Balance, Dec. 31 to BS
130,000
530,000
100,000
______
430,000
Accounts Payable
Dividends Payable
Other Liabilities
Advances from Davao
Share Capital, Davao
Retained Earnings, Davao
Capital Stock, Cebu
Retained Earnings Cebu
Total
a)
Acqn Cost
Equity in Sub.
Earnings
400,000
80,000
200,000
( 100,000)
180,000
220,000
80,000
140,000
_______
140,000
84,000
534,000
Consolidated
1,450,000
1,030,000
420,000
180,000
240,000
______
1)30,000
_______
140,000
56,000
56,000
240,000
( 56,000)
184,000
70,000
140,000
30,000
40,000
200,000
570,000
480,000
_______
1530,000
50,000
400,000
100,000
140,000
240,000
2)60,000
40,000
56,000
96,000
50,000
190,000
1)30,000
184,000
584,000
100,000
______
484,000
( 20,000)
76,000
50,000
160,000
120,000
300,000
4)30,000
3)40,000
100,000
480,000
_______
790,000
300,000
1,050,000
2)480,000
2)200,000
10,000
50,000
4)30,000
40,000
3)40,000
_______
200,000
1,970,000
60,000
20,000
50,000
50,000
1.000,000
430,000
1,000,000
484,000
______
500,000
190,000
1,530,000
790,000
2) 300,000
2) 80,000
Investment in Cebu
480,000
Adjust / Elim.
400,000
Statement of Financial Position

Cash
Accounts Receivable
Dividend Receivable
Advances to Cebu
Inventory
Other Assets
Investment in Cebu
Goodwill
Total
4.
Cebu
Dividends
(500,00 x 60%)
200,000
76,000
80,000
356,000
356,000
1,970,000
Equity in Subsidiary Earnings

30,000
Share in NI
(140000 x 60%)
84,000
84,000
Davao Co., & Subsidiary Cebu Co.

Working Paper for Consolidation
For the year ended Dec 31, 2010
Davao
Cebu
1050,000
850,000
200,000
100,000
100,000
84,000
184,000
_______
184,000
400,000
180,000
220,000
80,000
140,000
_______
140,000
_______
140,000
Adjust / Elim.
NCI
Consolidated
Income Statement
Sales
Cost of Sales
Gross Profit
Expenses
Net Operating Profit
Equity in Subsidiary Earnings
Total
Share of Minority
Net Income Forwarded
Statement of Retained
Earnings
Balance, Jan. 1:
D Co.
C Co.
Net Income forwarded
Total
Dividends, Davao Co.
Cebu Co.
Dec. 31, balance Forwarded
Financial Position
Cash
Accounts Receivable
Dividend Receivable
Advances to Cebu
Inventory
Investment in Cebu
Other Assets
Goodwill
Total
Accounts Payable
Dividends Payable
Other Liabilities
Advances from Davao
Capital Stock, Davao
Retained Earnings, Davao
Capital Stock, Cebu
1,450,000
1,030,000
420,000
180,000
240,000
1)84,000
56,000
56.000
400,000
184,000
584,000
100,000
______
484,000
56,000
184,000
400,000
100,000
140,000
240,000
2)60,000
50,000
190,000
1)30,000
70,000
140,000
30,000
40,000
200,000
534,000
50,000
160,000
570,000
480,000
40,000
56,000
96,000
20,000
76,000
184,000
584,000
100,000
______
484,000
120,000
300,000
4)30,000
3)40,000
100,000
300,000
1)54,000
2)480,000
1050,000
200,000
1,970,000
2)200,000
1,594,000
790,000
50,000
10,000
50,000
5)30,000
40,000
4)40,000
60,000
20,000
50,000
50,000
1000,000
484,000
1,000,000
484,000
500,000
2)300,000
200,000
Retained Earnings Cebu

Total
5 & 6.
________
1,594,000
a)
190,000
_______
790,000
76,000
80,000
356,000
356,000
1,970,000
Entries in Paco books for 2013 & 2014 if cost method:
2013
2014
Cash
Dividend Income (150,000 x 70%)
105,000
Cash
Dividend Income
(400,000 x 70%)
280,000
b)
Implied Value and Consideration
1,642,857
Subsidiary Interest:
CS (600,000)
RE (400,000)
Excess of Cost
642,857
Revaluation:
Plant & Equipment
(500,000)
Inventories
(50,000)
50,000 x 70%
Goodwill
92,857
c)
2) 80,000
Books of Parent: Investment in Sweet

Cash
Cash
Dividend Income
Working Paper: Dividend Income
Dividends, S Co
105,000
280,000
At 70%
1,150,000
420,000
280,000
450,000
At 30%
492,857
(180,000)
(120,000)
192,857
350,000
35,000
(150,000)
(15,000)
65,000
27,857
2010
1,150,000
105,000
_______
P150,000
________
P 100,000
280,000
105,000
105,000
280,000
280,000
105,000
280,000
35,000
35,000
420,000
280,000
500,000
50,000
92,857
Share Capital, S co
Retained Earnings, S Co
Share of NCI in AR and GW
NCI
180,000
120,000
192,857
Expenses
Cost of Sales
Plant and Equipment
Inventories
100,000
50,000
NI of Paco*
Consolidated NI
Share of NCI
Share of Parent
100,000
1,150,000
Share Capital, S co
Retained Earnings, S Co
Plant & Equipment
Inventories
Goodwill
Investment in S Co
Share of NCI in AR andGW
2013
350,000
150,000
200,000
395,000
595,000
60,000
P535,000
100,000
50,000
2011
Investment in S Co
Retained Earnings
NI of Sweet
Less Adjustments
Adjustments
12/31/13
12/31/14
420,000
420,000
400,000
92,857
1,150,000
192,857
1,185,000
147,857
180,000
180,000
147,857
492,857
100,000
100,000
50,000
2014
600,000
100,000
500,000
520,000
1,020,000
150,000
P870,000
507,857
100,000
*eliminate div income

NCI, Jan 1
P492,857
Share in Consolidated NI
60,000
Share in Dividends
(45,000)
NCI, Dec 31
P507,857
Retained Earnings, 1/1
P1,000,000
Net Income
535,000
Dividends
(200,000)
Retained Earnings, 12/31 P1,335,000
P 507,857
150,000
(120,000)
P537,857
P1,440,000
870,000
( 500,000)
P1,810,000

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CHAPTER 14

1. a)Outstanding shares (P1,000,000/P100)= 10,000 shares.

Investment Entry in Textbook Books:

Share Capital, Viewpoint

b) % of Interest: 9,000 / 12,000 = 75%

Share Capital, Viewpoint

c) % of Interest: 7,500 / 10,000 = 75%

Share Capital, Viewpoint

Share Capital, Viewpoint

2. a) Percent of ownership 8,000/10,000= 80%

Share Capital, Sol

% of interest= 9,000/10,000= 90%

Investment Cost and Implied Value

Working Paper entries:

3. Table for determination and allocation of excess.

Investment In Stocks 115,500

Equity over S Co.

Income over Subsidiary

Working paper adjustment and

Share Capital , Seashore

Share Capital, Seashore

Share Capital, Seashore

Share Capital, Seashore

Davao Co., & Subsidiary Cebu Co.

Statement of Financial Position

Equity in Subsidiary Earnings

Davao Co., & Subsidiary Cebu Co.

Retained Earnings Cebu

Entries in Paco books for 2013 & 2014 if cost method:

Books of Parent: Investment in Sweet

*eliminate div income

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