CHAPTER 18 MULTIPLE CHOICE 18-1:
a Equipment – at original original cost Accumulated depreciation depreciation : Time of sale Current depreciation based on Orig Origin inal al cost cost (P50 (P500 0,000 ,000/1 /10 0 year yearss
18-2:
P500,000
P250,000 50,0 50,000 00
b
et income ! "ol #nreali$ed gain on sale of computer, %ec& '1 )d*usted net income inority interest proportionate s-are Minority interest in net income income of subsidiary (MII!" (MII!" 18-3:
P100,000 ( '0 ' 0,000 P +0,000 '0. P #$,000
b
et income from on operations operations ! Prime #nreali$ed gain ! %onstream eali$ed net income ! Prime "econd Compa mpany net income %onsolidated net income
18-4:
P300,000
20 2005 P200,000 ('0,000 P1+0,000 100,000 P#&0,000
2006 P250,000 P250,000 150,00 ,000 P'00,000
c
et income ! "a #nreali$ed loss#pstream eali$ed loss ((P12,000 / 5 3 4/12 )d*usted net income ! "a
P100,000 12,000 ( 1, 1 ,200 P110,00
Minority interest in net income income of subsidiary (P$$0,00 (P$$0,00 ) #5*" P #&,&00 18-5:
c Equipment – at original original cost Accumulated depreciation+ depreciation+ Time of sale Curr Curren entt depr deprec ecia iati tion on (P60 (P600, 0,00 000/ 0/10 10
P$,000,000
P'40,000 60,0 60,000 00
P '50,000
100
18-6:
a
)d*usted net income ! "usie (P12,000 / 70. )dd bac8: #nreali$ed gain ! #pstream et income of !usie – #00 18-7:
P '0 '0,000 60,000 P$#0,000
a
Original cost )mount debited to Truc8 account !elling price of te truc- – Amount paid 18-8:
P100,000 (7,000 P 5#,000
c
et income ! Po #nreali$ed gain, %ec& '1 ! %" et income from on operation operation ! Po et income of "o Consolidated net income, %ec& '1, 200 99" (P10,000 3 20. Attributable to parent parent 18-9:
P200,000 ('0,000 2+0,000 10,000 P'50,000 ('4,000 P3$',000
b
"toc8-olders e;uity,
P1,000,000 '5,000 P1,0'5,000
Minority interest in net assets assets of subsidiary (P$,035,000 ) #0*"P #0&,000 18-10: b Conso!"a#$" n$# !nco%$ a##&!b'#ab$ #o (a&$n#: et income ! Pin8 #nreali$ed gain,
P'00,000 ( 50,000 2,500 P252,500
(2,00 ,000 P227,500 5,400 P#30,$00
101
M!no&!#) !n#$&$s# !n n$# ass$#s o* s'bs!"!a&) et assets,
P1,550,000 P70,000 '0,000
( +0,000 P1,70,000 ( 12 12,000 P1,74,000
Minority interest in net assets assets of subsidiary (P$,'.,000 ) #0*"P #/3,.00
18-11: a +$# ass$#s, $c. 31, 2008 inority interest, %ec& '1, 200 )dd: 9 s-are of unreali$ed profit in in ending in=entory in=entory #pstream (P'4,000 3 20. 3 20. 9 s-are of unreali$ed gain on sale of e;uipment #pstream (P40,000 3 20. ! (P12,000 / 5 inority interest before ad*ustment et assets – !tee, 1ec23$, 1ec23$, #00 (P#00,000 #0*" #0*" In/$s#%$n# !n #$/$ Co%(an) s#oc E'!#) %$#o" )c;uisition cost: et assets, %ec& '1, 200 >ess: net income ! ste=e 99" P'4,640 9 s-are of unreali$ed profit in ending 9n=entory ! #pstream 1,770 9 s-are of unreali$ed gain on sale of ?;uipment ! #pstream 6,400 99" per boo8 P7,000 %i=ided by 20. et assets,
P1,640 1,770 6,400 P200,000 P$,000,000
P1,000,000
270,000 P +40,000 3 0. P 40,000 20,000 P 42,000 P 162,000 ( 7, 7,000 ( 5,+40 ( ',700 P &&$,'0
102
18-12: a
et income from on operations operations ! Pipe Pipes Pipes s-are of "mo8ers ad*usted net income: et income #nreali$ed gain,
P700,000 P100,000 (50,00 ,000 5,000
55,000 P'55,000
18-13: "
et income from operations operations ! Parent Parents Parents s-are of ad*usted net income of "ub: et income #nreali$ed gain ! #pstream eali$ed gain: 200+ (P6,000/' 3 B 200 (P6,000/' )d*usted net income Consolidated net income 99" Attributable to parent parent
20 2007 P100,000
2008 P120,000
P 40,000 ( 6,000 +50 P 51,+50 P151,+50 (10,'50 P$'$,'00
P +5,000 ',000 P +,000 P16,000 (15,400 P$#,'00
18-14: " In/$s#%$n# !n !! Co%(an) s#oc E'!#) %$#o" )c;uisition cost 9n=estment income net of di=idends ! 2005 to 200+: 9ncrease in earnings (P500,000 ! P200,000 3 +5. 9n=estment income, %ec& '1, 200+: "-are of "ilis net income (P40,000 3 +5. 75,000 #nrea nreali li$$ed gain gain on sal sale of land land ! %ons onstr trea eam m (15,0 15,00 00 #nre #nreal ali$ i$ed ed loss loss on sale sale of buil buildi ding ng ! %on %onst stre ream am 10,0 10,000 00 eali$ed loss on sale of building (P10,000 / 5 3 +5. ( 1,500 9n=estment income, %ec& '1, 200: "-are of "ilis net income (P+0,000 3 +5. 52,500 eali$ed loss (P10,000 / 5 (2,000 %i=idends recei=ed: 200+: (P10,000 3 +5. +,500 200: (P20,000 3 +5. 15,000 Inestment in !ili %ompany stoc-, stoc-, 1ec2 3$, #00
P500,000 225,000
',500
50,500
(22,500 P&/$,500
10'
18-15: a
In/$s#%$n# !n a Co%(an) s#oc, $c. 31, 2008 )c;uisition cost 9n=estment income ! 2002 to 2004: 9ncrease in earnings (P500,000 ! P'00,000 3 60. 9n=estment income ! 200+ (see abo=e 9n=estment income ! 200: Poers s-are of "as "as net income (P120,000 3 60. P10,000 eali$ed loss on sale of are-ouse (P20,000/2 3 60. (6,000 (6,000 %i=idends recei=ed: 200+: ( P20,000 3 60. P 1,000 200: ( P'0,000 3 60. 2+,000 Inestment in !a4 %ompany stoc- account balance $#3$0
P550,000 10,000 101,250
66,000
(75,000 P5,#50
107
PROLEM P&ob$% 18-1 Computation of t-e missing amounts in t-e or8ing paper eliminations for P Corporation and " Company: (1 P470 ( P' P',200 3 20. (2 P2,540 ( P' P',200 3 0. (' P1,400 (P (P00 3 2 (7 P'20 ( P1 P1,400 3 20. (5 P1,20 ( P1 P1,400 3 0. (4 P',200 (P00 3 7 P&ob$% 18-2 a. Conso!"a#$" +$# Inco%$ et income from on operations operations ! P Company Company #nreal #nreali$e i$ed d gain gain on sale sale of e;uipm e;uipment ent,, %ec& %ec& '1 ! %onst %onstrea ream m )d*usted net income ! P Co, " Company net income %onsolidated net income
P200,000 ('0,00 ('0,000 0 P1+0,000 10,000 P350,000
b.
M!no& !no&!# !#) ) !n# !n#$& $&$s $s## !n !n n n$$# !n !nco% co%$ o* o* s'b s'bss!"!a !"!a&) &) (P10,000 3 20.
P '4 '4,000
c.
M!no& !no&!# !#) ) In# In#$& $&$$s# !n +$# +$# Ass$# ss$#ss o* o* 'b 'bs! s!"! "!a a&): "toc8-olders e;uity,
P 600,000 120,000 P1,020,000 3 20. P 207,000
P&ob$% 18-3 Pony %orporation and !ubsidiary !ubsidiary %onsolidated Income !tatement ear Ended 1ecember 3$, #00
"ales (P500,000 P'00,000 Dain on sale of mac-inery (sc-edule 1 Total re=enue Cost of sales P200,000 P1'0,000 Dross profit ?3penses: %epreciation (P50,000 P'0,000 ! P5,000 P +5 +5,000 Ot-er e3penses (P0,000 P170,000 220,000 Consolidated net income )ttr )ttrib ibut utab able le to mino inority rity intere terest st (P1 (P160,0 60,00 00 P5,0 P5,00 00 10 10,000 ,000 3 25. )ttributable to parent
P00,000 20,000 20,000 ''0,000 760,000
265,000 +5,000 (2,+ 2,+50 50 P244,250
105
!cedule $+ "elling price ! %ec& 2, 200 @oo8 =alue (P45,000 E 5 3' Dain on sale #nreali$ed gain (P25,000 ! P15,000 Total gain
P'4,000 24,000 10,000 10,000 P20,000
P&ob$% 18-4 a.
b.
Conso!"a#$" +$# Inco%$ et income from on operations operations ! P Company Company )d*usted net income of " Company: et income ! " #nreali$ed gain, 7/1/0 #pstream eali$ed gain, 12/'1/0 (P'0,000/5 3 6/12 Consolidated net income 99" (P127,500 3 20. )ttributable to parent
M!no& !no&!# !#) ) In# In#$& $&$$s# !n +$# +$# Ass$# ss$#ss o* o* 'b 'bs! s!"! "!a a&) "toc8-olders e;uity ,
P'00,000 P150,000 ( '0,000 7,500
127,500 727,500 (27,600 P'66,400
P00,000 P100,000 (25,500
+7,500 P+7,500 3 20. P117,600
P&ob$% 18-5 a.
b.
Conso!"a#$" +$# Inco%$ - 2008 et income from on operations operations ! @< Dain on sale of mac-ine, oss on sale of truc8 ,
P'00,000 (50,000 2,500 P252,500 P(70,000 15,000 ( ',000
(2,000 P227,500
P (70,000 15,000 ( ',000 P ( 2,000 3 20. P ( 5,400
104
c.
M!no& !no&!# !#) ) In# In#$& $&$$s# !n +$# +$# Ass$# ss$#ss o* o* 'b 'bs! s!"! "!a a&) et assets,
P1,550,000 (+0,000 P1,70,000 12,000 P1,762,000 3 20. P 26,700
P&ob$% 18-6 T$as Co%(an) an" 'bs!"!a&) Conso!"a#$" Inco%$ #a#$%$n# $a& En"$" $c$%b$& 31, 2008
"ales Cost of goods sold Dross profit ?3penses (P200,000 P100,000 ! P,000 Consolidated net income )ttributable to minority interest (P150,000 3 25. )ttributable to parent
P1,500,000 450,000 50,000 262,000 P 55,000 '+,500 P 520,500
)d*ustment for e3penses e3penses (depreciation (depreciation G P70,000 / 5 years& P&ob$% 18-7 a.
L$o Co%(an) an" 'bs!"!a&) Conso!"a#$" aanc$ $$# o&!n Pa($& $c$%b$& 31, 2007
6eo %ompany 101,000 0,000 150,000 700,000 171,000
7aurus %orporation 20,000 70,000 60,000 '00,000
Total debits
+2,000
750,000
)ccumulated depreciation )ccounts payable otes payable Common stoc8 etained earnings
1'5,000 60,000 200,000 100,000 '7+,000
5,000 25,000 60,000 200,000 50,000
Cas- and recei=ables 9n=entory >and @uilding and e;uipment 9n=estment in stoc8 !Taurus
9 in net assets in "ubsidiary Total
+2,000
750,000
Ad8ustments
9 Eliminations
1ebit
%redit
(2 10,000 (' 6, 6 ,000 (' 15,000
(1150,000 (2 4,000
%onsoli: dated 121&000 120,000 250,000 +06,000
1,200,000 (' 27,000
277,000 115,000 260,000 100,000 '7+,000
(1100,000 (2 7,000
107,000
(1200,000 (1 50,000
1,200,000
10+
(1 To eliminat eliminatee e;uity e;uity account accountss of subsidi subsidiary ary (2 To intercom intercompany pany gain on sale sale of of land& land& (' To eliminate intercompany gain gain on sale of e;uipment debited to 9n=estment account account and restore restore e;uipment to its original boo8 =alue&
b.
L$o Co%(an) an" 'bs!"!a&) Conso!"a#$" aanc$ $$# $c$%b$& 31, 2008
Cas- and recei=ables 9n=entory >and @uilding and e;uipment >ess: )ccumul mulated deprec reciation Total assets
P121,000 120,000 250,000 P+06,000 277,00 ,000 745,000 P654,000
)ccounts payable otes payable Common stoc8 stoc8 etained earnings inority interest in net assets of subsidiary Total liabilities and e;uity
P115,000 260,000 100,000 '7+,000 107,000 P654,000
P&ob$% 18-8 a.
o&! o&!n n Pa($ Pa($&& E!% E!%!n !na# a#!o !on n En En#& #&!$ !$ss $c. $c. 31, 31, 2008 2008
(1
(2
('
(7
%i=idend income ino inori rity ty inte intere rest st in net net asse assets ts of subs subsid idia iary ry %i=idends declared !
7,000 1,00 1,000 0 5,000
Common stoc8 !
120,000 '0,000
70,000
etained earnings ! and To eliminate unrealized gain on sale of land !pstream &
70,000
10,000
10
(5
(4
(+
(
Dain on sale of e;uipment @uilding and e;uipment )ccumulated depreciation To eliminate gain on sale of equipment )ccumulated depreciation %epreciation To ad"ust e#cess depreciation
20,000 5,000 25,000
2,000 2,000
)ccounts payable +,000 )ccounts recei=able To eliminate intercompany paya$les and receiva$les &
+,000
inority interest in net income of subsidiary 4,000 inority interest in net assets of subsidiary (P70,000 ! 10,000 3 20.
4,000
106
b.
;!nc$n# Co%(an) an" 'bs!"!a&) Conso!"a#!on o&!n Pa($& $c$%b$& 31, 2008
Inco%$ #a#$%$n# "ales Dain on sale of e;uipment %i=idend income Total re=enues Cost of goods sold %epreciation Ot-er e3penses Total cost and e3penses et/consolidated et/consolidated income %& in net income income of su$sidiary su$sidiary et income carried carried forard forard R$#a!n$" Ea&n!ns #a#$%$n# etained earnings,
;incent %ompany
270,000 20,000 7,000 247,000 170,000 25,000 15,000 10,000 7,000
120,000
7,000
70,000
267,000
105,000
%redit
(4
(
70,000 175,000 5,000
'7,000
170,000
aanc$ $$# Cas- and recei=ables 9n=entory >and @uildings and e;uipment 9n=estment in
11',000 240,000 0,000 500,000 140,000
'5,000 60,000 0,000 150,000
Total
1ebit
120,000 40,000 15 1 5,000 5,000 0,000 70,000
7,000 '+,000 '0,000
)ccumulated depreciation )ccounts payable @onds payable Common stoc8 etained earnings from abo=e %& in net assets assets of su$sidiary su$sidiary
9 Eliminations
(5 20,000 (1 7,000
et income from from abo=e Total %i=idends declared etained earnings, %ec& '1 Carried forard
Doodill Total
Ad8ustments
2,000
4,000
(2 50 50,000 (7 ,000
205,000 40,000 200,000 '00,000 '7,000
(1
5,000
(+
+, + ,000
(7 10,000 (5
5,000
(4 (+
'55,000
2,000 +, +,000
171,000 '50,000 150,000 455,000 70,000 1,''4,000
'55,000 (5 25,000
(2100,000 (1 (7
1,11',000
64,000 7'+,000 '0,000 70+,000
(2120,000 (' 70,000
75,000 20,000 50,000 100,000 170,000
'40,000 '40,000 200,000 ',000 20,000 25,000 102,000 (4,000 64,000
'71,000
(' 70,000 1,11',000
%onsoli: dated
1,000 2,000
(2 '0,000 ( 4,000
275,000
275,000
2+',000 +',000 250,000 '00,000 70+,000 '',000
1,''4,000
&
110
c.
Conso!"a#$"
Assets Cas- and recei=ables 9n=entory >and @uildings and e;uipment >ess: )ccumulated depreciation Doodill Total assets 6iabilities and !toc-olders= equity 'ia$ilities 'ia$ilities )ccounts payable @onds payable Total liabilities (toc)holders* +quity Common stoc8 etained earnings inority interest in net assets of subsidiary Total liabilities and stoc8-olders e;uity
P 171,000 '50,000 150,000 P455,000 2+',000
'2,000 70,000 P1,04',000
P
+',000 250,000 P '2',000 P'00,000 70+,000 '',000
+70,000 P1,04',000
;!nc$n# Co%(an) an" 'bs!"!a&) Conso!"a#$" Inco%$ #a#$%$n# $a& En"$" $c$%b$& 31, 2008
"ales Cost of goods sold Dross profit ?3penses: %epreciation Ot Ot-er e3penses Consolidated net income )ttributable to minority interest )ttributable to parent
P '40,000 200,000 140,000 P ',000 20,000
5,000 102,000 4,000 P 64,000
;!nc$n# Co%(an) an" 'bs!"!a&) Conso!"a#$" R$#a!n$" Ea&n!ns $a& En"$" $c$%b$& 31, 2008
etained earnings,
P 26 267,000 7+,000 '71,000 64,000 ( '0,000 P 70+,000
111 111
P&ob$% 18-9 =a>
P100,000 (t-e common stoc8 of P-antom only
=b>
P170,000
?
P250,000 (P56',000 ! P'7',000 P'7',000
=">
P100,000 (P124,000 ! P'5,000 I(P25,000 P5,000 P101,000J
=$>
0
(f
Purc-ase price,
=
P+,0 P+,000 00 (P+0 (P+0,0 ,00 00 P60, P60,00 000 0 ! P15 P15',000 ,000
=>
0
=!>
P510,000 IP'75,000 P150,000 P150,000 (P40,000 ! P75,000J
=@>
P2+,000 G P10,000 P0,000 I(P40,000/5 I(P40,000/5 3 7 J >ess I(P75,000 / ' 3 2 yearsJ
=>
etained earnings, %ec& '1, 200 >ess: "-are of unreali$ed unreali$ed profit on sale of e;uipment: e;uipment: Dain record IP75,000 ! (P40,000 3 '/5J eali$ed in 200 (P6,000 / ' #nreali$ed P-antoms interest Consolidated retained earnings
=>
P105,000 '0,000 4,000 ,000 P171,000 (+,000 (',400 P +0,700
P'0,000 P6,000 ',000 P4,000 3 40.
et income ! "-ado, "-ado, 200 (P250,000 ! P220,000 eali$ed gain on sale of building c %ec& '1, 2004 ! #pstream )d*usted net income inority interest inority interest in net income of subsidiary
',400 P'+4,700 P
'0,000 ',000 P '',000 3 70. P 1',200
112
P&ob$% 18-10 !upporting computations =1>
)llocation sc-edule (purc-ase price >ess: @o @oo8 =alue of interest ac;uired (P'50,000 3 40. %ifference )llocated to patents (P120,000 3 40. Doodill
P '+2,000 210,000 P 142,000 ( +2,000 P 60,000
)morti$ation of patents (P120,000 / 12
P
10,000
=2>
Un&$a Un&$a!$ !$" " a!n a!n on !n#$&c !n#$&co%( o%(an) an) sa$ sa$ o* o* b'! b'!"!n "!n U(s#& U(s#&$a% $a%,, Ban. Ban. 1, 2006 2006: #nreali$ed gain at date of sale (P0,000 ! P'0,000 P 50,000 eali$ed gain (P50,000 / 5 3 2 years (20,000 #nreali$ed gain as of
=3>
R$a! R$a!$" $" (&o (&o*!# *!# *&o% *&o% !n#$ !n#$&co &co%(a %(an) n) sa$ sa$ o* !n/$n# !n/$n#o&) o&) on ons#& s#&$a% $a%,, 11 1108 08: emaining in=entory as of %ec& '1, 200+ P 50,000 Dross profit rate on sales ! 200+ (P'0,000 / P150,000 3 20 20. eali$ed profit as of
=4>
Un&$a Un&$a!$ !$" " (&o*! (&o*!## *&o% *&o% !n#$&c !n#$&co%( o%(an) an) sa$ sa$ o* o* !n/$n !n/$n#o& #o&) ) ons ons#&$ #&$a%, a%, 1231 123108 08 emaining in=entory as of %ec& '1, 200 P 70,000 Dross profit rate on sales ! 200 (P7,000 / P140,000 3 '0 '0. #nreali$ed profit as of %ec& '1, 200 P 12,000
Conso!"a#$" baanc$s 2008 a.
b.
Cos# o* oo"s o" Cost of goods sold ! )pe3 Cost of goods sold ! "mall 9ntercompany sale of in=entory ! 200 eali$ed profit on beginning in=entory #nreali$ed profit on ending in=entory Consolidated
P 740,000 205,000 (140,000 ( 10,000 12,000 P 50+,000
O($&a#!n E($ns$s Operating e3penses ! )pe3 Operating e3penses ! "mall )morti$ation (o& 1 abo=e ?3cess depreciation (P50,000 / 5 years Consolidated
P 1+0,000 +0,000 10,000 (10,000 P 270,000
11'
c.
Conso!"a#$" +$# Inco%$ "ales (after elimination of intercompany sales Cost of goods sold (a Operating e3penses (b inority interest in net income of subsidiary: et income ! "mall eal eali$ i$ed ed gain gain on sale sale of buil buildi ding ng ! #ps #pstr trea eam m )d*usted net income inority interest )ttributable to parent
P 70,000 (50+,000 (270,000 P25,000 10,0 10,000 00 P'5,000 3 70.
( 17,000 P +6,000
".
Conso nso!" !"a# a#$" $" R$#a! $#a!n$ n$" "E Ea& a&n! n!n nss, Ban Ban.. 1, 1, 20 2008 etained earnings,
$.
Conso!"a#$" In/$n#o&) 9n=entory ! )pe3 9n=entory ! "mall #nreali$ed profit in in=entory ! %ec& '1, 200 Consolidated in=entory
P 2'',000 226,000 ( 12 12,000 P 750,000
Conso!"a#$" '!"!n @uildings ! )pe3 @uildings ! "mall #nreali$ed gain,
P '0,000 202,000 (50,000 '0,000 P 760,000
*.
.
Conso!"a#$" Pa#$n#s Patents ! "mall )llocation )morti$ation, 2002 ! 200 (P10,000 3 + Consolidated patents (net
&
Conso!"a#$" Co%%on #oc G G P'00,000 ()pe3 common stoc8
!.
M!no& !no&!# !#) ) In#$ In#$&&$s# !n +$# +$# Ass$# ss$#ss o* 'bs 'bs!" !"!a !a&) &) "toc8"toc8-old olders ers e;uity e;uity ! "mall, "mall, %ec& %ec& '1, '1, 200 200 (P100, (P100,000 000 P720,0 P720,000 00 #nrea reali$ed gain on sale of building, %ec& '1,200 ! #pstream )d*usted net assets, %ec& '1, 200 inority interest inority interest in net assets of subsidiary
P
20,000 120,000 ( +0,000 P +0,000
P 520,00 520,000 0 (20,000 P 500,000 3 70. P 200,000
117
P&ob$% 18-11 a.
o&!n Pa($& E!%!na#!on En#&!$s (1
(2
('
(7
(5
(4
etained earnings !
4,000
9ncome from %u8e Company inority interest in net assets of subsidiary %i=idends declared ! %u8e 9n=estment in %u8e To eliminate intercompany di=idends&
7,000 27,000
4,000
40,000 7,000
Common stoc8 ! %u8e '20,000 )P9C ! %u8e 60,000 etained earnings, 1/1 ! %u8e 420,000 9n=estment in %u8e (40. inority interest in net assets of subsidiary (70. To eliminate e;uity accounts of %u8e as of beginning of year& Doodill 9n=estment in %u8e To allocate difference 9mpairment loss Doodill To reduce goodill for impairment& "ales
100,000 100,000
5,000 5,000
200,000
Cost of goods sold To eliminated intercompany sales (+
(
(6
(10
(11
9n=estment in %u8e inority interest in net assets of subsidiary Cost of goods sold To eliminate reali$ed profit in beginning in=entory ! #pstream
41,000 712,000
200,000
4,000 7,000 10,000
Cost of goods sold 12,000 9n=entory To eliminate unreali$ed profit in ending in=entory ! #pstream
12,000
9n=estment in %u8e >and To eliminate gain on sale of land ! %onstream
70,000 70,000
>iabilities )ccounts recei=able To eliminate intercompany debt&
70,000
ino inorrity ity intere terest st in net net inc income ome of subs ubsidia idiary ry inority interest in net assets of subsidiary
5',2 5',200 00
70,000
5',200
115
(P170,000 10,000 ! P12,000 ! P5,000 3 70.
b.
c.
".
M!no& !no&!# !#) ) In# In#$& $&$$s# !n +$# +$# Inco Inco%$ %$ o* 'b 'bs! s!"! "!a a&) et income ! %u8e eali$ed profit in beginning in=entory ! #pstream #nreali$ed profit in ending in=entory ! #pstream 9mpairment loss )d*usted net income ! %u8e inority interest 99"
P170,000 10,000 ( 12,000 ( 5,000 P1'',000 3 70. P 5',200
M!no& !no&!# !#) ) In# In#$& $&$$s# !n +$# +$# Ass$# ss$#ss o* o* 'b 'bs! s!"! "!a a&) "toc8"toc8-old olders ers e;ui e;uity ty,, 1/1/0 1/1/0 ! %u8e %u8e (P'2 (P'20,0 0,000 00 P60,00 P60,000 0 420,00 420,000 0 9ncr 9ncrea ease se in earn earniings ngs ! 200 00 (P1 (P17 70,00 0,000 0 ! P40, P40,0 000 00 P0, P0,00 000 0 #nreali$ed profit in ending in=entory (12,000 eali$ed profit in beginning in=entory 10,000 Doodill impairment loss ( 5,000
P1,0'0 P1,0'0,00 ,000 0
+',000
)d*usted net assets, 12/'1/0 inority interest 9)"
P1,10',000 3 70. P 771,200
Conso!"a#$" +$# Inco%$ et income from on operations operations ! @aron (P27,000 ! P7,000 #nreali$ed gain on sale of land )d*usted net income @aron )d*usted net income of %u8e (P1'',000 3 40. Consolidated net income
P 200,000 (10,000 P 160,000 1'',000 P '2',000
P&ob$% 18 12 P'#o Co&(o&a#!on an" 'bs!"!a&) #a& Co&(o&a#!on Co%(a&a#!/$ Conso!"a#$" Inco%$ #a#$%$n# $a&s En"$" $c$%b$& 31, 2007 an" 2008
& / "ales Cost of goods good s sold Dross profit Operatio Oper ation n e3penses e3pe nses Consolidated net income inority interest in net income of subsidiary )ttributable )ttributa ble to e;uity -olders of Pluto !upporting computations+ computations+ 2 & %onsolidated sales+ Combined sales >ess: intercompany intercomp any sales
,ecem$er -. 2008 P00,000 772,000 772, 000 '5,000 1+,000 1+, 000 10,000 10,000 P1+0,000
2007 P440,000 '4,000 '4, 000 262,000 1',000 1', 000 157,000 10,000 P177,000 P177,00 0
/ / & & & &
2008
2007
2 /
P50,000 (50,000
P+00,000 (70,000
&
114
Consolid Cons olidate ated d sales sale s
P00,00 P00 ,000 0
P440,00 P440 ,000 0
&
%onsolidated cost of goods sold+ Combined costs of good sold 9ntercompany sales #nreali$ed profit in ending in=entory #nreali$ed #nreali$ ed profit in beginning in=entory Consolidated Consolida ted cost of goods sold
P760,000 (50,000 10,000 (,000 P772,000
P700,000 (70,000 ,000 P'4,000 P'4,00 0
& &
%onsolidated operating e)penses Combined operating e3penses eali$ed eali$e d gain on sale of e;uipment (P10,000/&2 (P10,000 /&2 Consolidated Consolida ted operating operatin g e3penses
P10,000 (2,000 P1+,000
P170,000 (2,000 P1',000 P1',00 0
& &
Minority interest in net income income of subsidiary "tar Companys reported net income Dain on upstream sale of land #nreali$ed gain in upstream, in=entory sales eali$ed net income inorit in ority y interest inte rest inority interest in net income of subsidiary
P45,000 (5,000 (10,000 P50,000 20. P10,000
P50,000 & P50,000 20. P10,000
& &
11+
11
