Excess amortization expenses (Schedule 1) (6,300)

Consolidated net income P135,700

4. Consolidated Equipment
Book values added together P370,000
Allocation of purchase price 54,400
Excess depreciation (P6,800 × 3) (20,400)
Consolidated equipment P404,000
5.Consolidated Buildings
Book values added together P288,000
Allocation of purchase price (10,000)
Excess depreciation (P500 × 3) 1,500
Consolidated buildings P279,500
6. Consolidated goodwill
Allocation of excess fair value to goodwill P21,600
7. Consolidated Common Stock P290,000
As a purchase, the parent's balance of P290,000 is used (the acquired company's common
stock will be eliminated each year on the consolidation worksheet).
8. Consolidated Retained Earnings P410,000
Tyler's balance of P410,000 is equal to the consolidated total because the equity method
has been applied.

Problem XIII – 80% Partial Goodwill - Cost Model

Correction: The dividend income in the trial balance should be P38,400 instead P48,000

Requirements 1 to 4:
Schedule of Determination and Allocation of Excess (Partial-goodwill)
Date of Acquisition – January 1, 20x4
Fair value of Subsidiary (80%)
Consideration transferred……………………………….. P 372,000
Less: Book value of stockholders’ equity of S:
Common stock (P240,000 x 80%)……………………. P192,000
Retained earnings (P120,000 x 80%)………………... 96,000 288,000
Allocated excess (excess of cost over book value)….. P 84,000
Less: Over/under valuation of assets and liabilities:
Increase in inventory (P6,000 x 80%)……………… P 4,800
Increase in land (P7,200 x 80%)……………………. 5,760
Increase in equipment (P96,000 x 80%) 76,800
Decrease in buildings (P24,000 x 80%)………..... ( 19,200)
Decrease in bonds payable (P4,800 x 80%)…… 3,840 72,000
Positive excess: Partial-goodwill (excess of cost over
fair value)………………………………………………... P 12,000

The over/under valuation of assets and liabilities are summarized as follows:

S Co. S Co. (Over) Under
Book value Fair value Valuation
Inventory………………….…………….. P 24,000 P 30,000 P 6,000
Land……………………………………… 48,000 55,200 7,200
Equipment (net)......... 84,000 180,000 96,000
Buildings (net) 168,000 144,000 (24,000)
Bonds payable………………………… (120,000) ( 115,200) 4,800
Net……………………………………….. P 204,000 P 294,000 P 90,000