8/19/2019 Positive Corporation Blabla

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St. Paul School of Professional

Palo, Leyte

Practical Accounting II TEGIO

Problem I

Positive Cororation ac!uire" #$% of the outstan"ing common stoc& of Synergy

Comany on 'une (, )$(* for P*#+,)*$.

Synergy Comanys stoc&hol"ers e!uity comonents at the en" of this year are as

follo-s Or"inary shares, P($$ ar, P)*$,$$$, APIC P((),*$$, /etaine" earningsP))),*$$.

 0on1controlling interest is measure" at fair value.

All the assets of Synergy -ere fairly value", e2cet for inventories, -hich are

overstate" by P((,$$$ an" e!uiment, -hich -as un"erstate" by P(*,$$$.

/emaining useful life of e!uiment is 3 years.

4oth Comanies use the straight1line metho" for "ereciation an" amorti5ation.Stoc&hol"ers e!uity of Positive on 'anuary (,)$(* is comose" of Or"inary sharesP6*$,$$$, Share remium P(6*,$$$, /etaine" Earnings P*)*,$$$.

7air value of non1controlling interest on the "ate of ac!uisition is P((6,*$$$.

Goo"-ill, if any, shoul" be -ritten "o-n by P(3,))* at year1en".

 0et income for the first year of arent an" subsi"iary are P6*,$$$ an" P3),*$$

8 from "ate of ac!uisition9 resectively.

:ivi"en"s "eclare" at the en" of the year amounte" to P)$,$$$ an" P(*,$$$. :uring

the year, there -as no issuance of ne- or"inary shares.

 

(. ;hat is the balance of the non1controlling interest in net assets of subsi"iary on:ecember <(,)$(*=

A. P(3*,(+6.*$

4. P()6,)3).*$C. P()3,)3).*$

:. P()(,>(6.*$

). ;hat is the amount of consoli"ate" sharehol"ers e!uity=

A. P(,*)$,<3*4. P(,+3),)+).*$

C. P(,3+),)+).*$

:. P(,+33,*#6.*$

8/19/2019 Positive Corporation Blabla

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St. Paul School of Professional

Palo, Leyte

Practical Accounting II TEGIO

Problem II

Ac!uirer Cororation ac!uires )*% of Ac!uire" Comanys common stoc& for P(>$,$$$

cash an" carries the investment using the cost metho". After three months, Parent urchases another +$% of Subsi"iarys common stoc& for P*3$,$$$. On this "ate,

ac!uire" comany reorts i"entifiable net assets -ith carrying value of P6)$,$$$ an" fair 

value of P>)$,$$$. The liabilities of the ac!uire" comany has a boo& value an" a fair value of P)#$,$$$. The fair value of the (*% non1controlling interest is P()*,$$$.

?o- much is the goo"-ill or 8gain on ac!uisition9

A. P8(6,$$$9

4. P)*$,$$$

C. P8<$,$$$9

:. P)+<,$$$