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Conso FS Subsequent

Popoy Company acquired 70% of Sasha Company. The document provides financial information for Popoy, Sasha, and the consolidated entity as of January 1, 2017 and December 31, 2017. It also provides additional information and requires calculating various financial metrics for the consolidated financial statements, including goodwill, non-controlling interest, net income, retained earnings, and assets and liabilities. The second problem discusses Pare Company acquiring 75% of Kidd Company and requires calculating retained earnings, minority interest, and common stock for the consolidated financial statements. The third problem discusses Bell Company acquiring 80% of Demers Company and requires calculating investment amounts and non-controlling interest in income over multiple periods.

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769 views1 page

Conso FS Subsequent

Popoy Company acquired 70% of Sasha Company. The document provides financial information for Popoy, Sasha, and the consolidated entity as of January 1, 2017 and December 31, 2017. It also provides additional information and requires calculating various financial metrics for the consolidated financial statements, including goodwill, non-controlling interest, net income, retained earnings, and assets and liabilities. The second problem discusses Pare Company acquiring 75% of Kidd Company and requires calculating retained earnings, minority interest, and common stock for the consolidated financial statements. The third problem discusses Bell Company acquiring 80% of Demers Company and requires calculating investment amounts and non-controlling interest in income over multiple periods.

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rei
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Consolidated Financial Statement- Subsequent to Year of Acquisition

Problem Set for Discussion

PROBLEM 1: The following Statement of Financial Position were prepared for Popoy and Sasha Company on January 1, 2017 just
before they entered into business combination:
POPOY COMPANY SASHA COMPANY
@BV @FV @BV @FV
Cash and Receivables 900,000 900,000 160,000 160,000
Inventory 600,000 800,000 100,000 130,000
Building (5 years) 1,125,000 1,400.000 300,000 400,000
Equipment 300,000 400,000 250,000 200,000
Accounts Payable 450,000 400,000 50,000 50,000
Bonds Payable 750,000 750,000 40,000 40,000
Common Stock
@20 par 750,000
@10 par 200,000
APIC 150,000 50,000
Retained Earnings 825,000 470,000
On the same day, Popoy purchased 70% common shares outstanding of Sasha for 500,000. On December 31, Popoy Company and
Sasha Company show the results of their own operations:
Popoy Sasha
2017 262,500 200,000
Additional Information:
1. The fair value of NCI is assessed at 220,000
2. Popoy declared dividends amounting to 80,000 while Sasha declared and paid dividends of 50,000
Required:
a. How much is the amount of goodwill (gain on bargain) to be presented in the 2017 Consolidated FS?
b. How much is the NCI in the Net income of Subsidiary in 2017?
c. How much is the Consolidated Net Income in 2017?
d. How much of the Consolidated Net income is attributable to Non Controlling Interest in 2017?
e. How much of the Consolidated Net Income is attributable to controlling Interest in 2017?
f. How much is the amount of NCI in Net Assets of the Subsidaiary as of December 31, 2017?
g. How much is the consolidated retained earnings?
h. How much is the consolidated SHE?
i. How much is the consolidated liabilities in 2017?
j. How much is the consolidated assets in 2017?
PROBLEM 2: On January 2. 2014, Pare Co. Purchased 75% of Kidd Co. outstanding common stock. Selected balance sheet data at
December 31. 2014 is as follows:
Pare Kidd
Total Assets 420,000 180,000
Liabilities 120,000 60,000
Common Stock 100,000 50,000
Retained Earnings 200,000 70,000
During 2014, Pare and Kidd paid cash dividends of 25,000 and 5,000 respectively, to their stockholders. There are no other
intercompany transactions.
a. In its Consolidated Retained Earnings, what amount should Pare report as dividends paid?
b. In Pare’s Consolidated Balance sheet, what amount should be reported as minority interest in net assets
c. What amount should be reported as common stock
PROBLEM 3: Bell Company acquires 80% of Demers Company for 500,000 on January 1. 2015. Demers reported common stock of
300,000 and retained earnings of 200,000 on that date. Equipment was undervalued by 30,000 and building was undervalued by
40,000, each having a 10 year remaining useful life. Any excess consideration transferred over fair value was attributed to goodwill with
an indefinite useful life. Based on annual review, goodwill has not been impaired.
Demers earn income and pays dividends as follows:
2015 2016 2017
Net income 100,000 120,000 130,000
Dividends 40,000 50,000 60,000
Assume the initial value is applied.
Required: Compute for the following;
a. Bell’s Investment at December 31, 2015
b. Investment in Demers in December 2017
c. Income from Demers for the year ended December 31, 2017
d. NCI in Net Income at December 31, 2016

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