Book Value FV ALLOCATION OF EXCESS TO IA&L

P Co S Co S Co. FV
Cash 5,500 200 200 S Co.
Trade and Receivable 1,200 600 550 Cash 200
Inventory 2,500 1100 1200 Trade and Receivable 550
Other Current Assets 650 250 300 Inventory 1200
Land 3,500 2000 2500 Other Current Assets 300
Building 4,000 2200 2250 Land 2500
Equipment 2,600 1,200 1,300 Building 2250
total Assets 19,950 7,550 8,300 Equipment 1,300
Trade and Other Payables 900
Trade and Other Payabl 1,700 850 900 Bond Payable 3200
Bond Payable 7,000 3,000 3200 Amount allocated to IA and L
Share Cap 9,000 2500 Goodwill
Share Premium 1,000 500 Excess
Retained Earnings 1,250 700
19,950 7,550
 Schedule of Amortization of Excess
Book Value
S Co Excess Original Amount
200 - T and Receivable (50)
600 (50) cr Inventory 100
1100 100 dr Other Current Assets 50
250 50 dr Land 500
2000 500 dr 10 Building 50
2200 50 dr 10 Equipment 100
1,200 100 dr Trade and Other Payables (50)
850 (50) cr 5 Bond Payable (200)
3,000 (200) cr Goodwill 800
500 1,300
800 dr
1,300
Year 1 Year 2-5 Year 6-10
50 collections
(100) sold
(50) expired
sold
(5) (5) (5) depre/sold Net Income 3260
(10) (10) (10) depre/sold Amortized (25)
50 paid 3235
40 40 term bonds

(25) 25 (15)
 Book Value FV
P Co S Co S Co.
Cash 5,500,000 200,000 200,000
Trade and Other Receivable
Inventory 2,000,000 850,000 1,200,000
Other Current Assets 650,000 250,000 300,000
Land 3,500,000 2,000,000 2,500,000
Building 4,000,000 2,200,000 2,250,000
Equipment 2,600,000 1,200,000 1,300,000
total Assets 18,250,000 6,700,000 7,750,000

Trade and Other Payables

Bond Payable 7,000,000 3,000,000 3,200,000
Share Cap 9,000,000 2,500,000
Share Premium 1,000,000 500,000
Retained Earnings 1,250,000 700,000
18,250,000 6,700,000

ALLOCATION OF EXCESS TO IA&L

FV Book Value
S Co. S Co Excess
Cash 200,000 200,000 -
Trade and Other Receivable 0 0 - cr
Inventory 1,200,000 850,000 350,000 dr
Other Current Assets 300,000 250,000 50,000 dr
Land 2,500,000 2,000,000 500,000 dr
Building 2,250,000 2,200,000 50,000 dr
Equipment 1,300,000 1,200,000 100,000 dr
Trade and Other Payables 0 0 - cr
Bond Payable 3,200,000 3,000,000 (200,000) cr
Amount allocated to Identifiable Assets and Liabilities 850,000
Goodwill 450,000 dr
Excess 1,300,000

Consideration Transferred 5,000,000

NCI 0
Total 5,000,000
Less: FV Of NET ASSET 4,550,000
Goodwill 450,000

Fair Value as a Whole 5,000,000

Book Value 3,700,000
Excess/ Differencial 1,300,000
 Books Of P Co.
Date (2016) Account Title Dr Cr Date (2016)
During the yeaCash 30,000,000 During the ye
Sales 30,000,000

During the yeaCOS 18,000,000 During the ye

Inventory 18,000,000

Dec-31 Deprecation Expense 660000 Dec-31

Accumulated Deprecation - Building 400000
Accumulated Deprecation - Equipment 260000

During the yeaOther Expenses 4,800,000 During the ye

Cash 4,150,000
Other Current Assets 650,000

During the yeaInventory 19,500,000 During the ye

Cash 19,500,000

During the yeaRetained Earnings 1,000,000 During the ye

Cash 1,000,000

Jan-01 Investment in S C0. 5,000,000 Jan-01

Cash 5,000,000
During the year
100% Investment in S C0. 3260000
Equity in S Co Profit 3260000

Cash 400000
Investment in S C0. 400000

Equity in S Co Profit 375,000

Investment in S C0. 375,000

Closing Entries
Sales 30,000,000
Equity in S Co Profit 2,885,000
COS 18,000,000
Depreciation Expense 660000
Other Expenses 4,800,000
Retained Earnings 9,425,000

Schedule of Amortization of Excess

Original Amount Year 1 Year 2-5 Year 6-10

 Trade and Other Receivable - -
Inventory 350,000 (350,000)
Other Current Assets 50,000 (50,000)
Land 500,000
10 Building 50,000 (5,000) (5,000) (5,000)
10 Equipment 100,000 (10,000) (10,000) (10,000)
Trade and Other Payables - -
5 Bond Payable (200,000) 40,000 40,000
Goodwill 450,000
1,300,000 (375,000) 25,000 (15,000)
B00ks of S. Co
Account Title Dr Cr
Cash 15,000,000
Sales 15,000,000

COS 9,000,000
Inventory 9,000,000

Deprecation Expense 340,000

Accumulated Deprecation - Building 220,000
Accumulated Deprecation - Equipment 120,000

Other Expenses 2,400,000

Cash 2,150,000
Other Current Assets 250,000

Inventory 10,000,000
Cash 10,000,000

Retained Earnings 400,000

Cash 400,000

Closing Entries
Sales 15,000,000
COS 9,000,000
Depreciation Expense 340,000
Other Expenses 2,400,000
Retained Earnings 3,260,000
sold
expired
sold
depre/sold
depre/sold
paid
term bonds
 P Co S Co Adjustment and Elimination
Statement of Profit or Loss DR CR
Sales 30,000,000 15,000,000
COS 18,000,000 9,000,000 350,000
Gross Profit 12,000,000 6,000,000
Deprecation Expense 660,000 340,000 15,000
Other Expenses 4,800,000 2,400,000 50,000 40,000
Equity in S Co Profit 2,885,000 2,885,000
Net Income 9,425,000 3,260,000

Statement of Retained Earnings

Retained Earnings, beg 1,250,000 700,000 700,000
Net Income 9,425,000 3,260,000
Less: Dividend 1,000,000 400,000 400,000
Retained, End 9,675,000 3,560,000
Statement of Financial Position
Cash 6,250,000 2,650,000
Trade and Other Receivable
Inventory 3,500,000 1,850,000
Other Current Assets - -
Land 3,500,000 2,000,000 500,000
Building 4,000,000 2,200,000 50,000
Accumulated Deprecation - Buildin (400,000) (220,000) 5,000
Equipment 2,600,000 1,200,000 100,000
Accumulated Deprecation - Equipm (260,000) (120,000) 10,000
Investment in Subsidiary 7,485,000 7,485,000
Goodwill 450,000
total Assets 26,675,000 9,560,000

Trade and Other Payables

Bond Payable 7,000,000 3,000,000 40,000 200,000
Share Cap 9,000,000 2,500,000 2,500,000
Share Premium 1,000,000 500,000 500,000
Retained Earnings 9,675,000 3,560,000
26,675,000 9,560,000 8,140,000 8,140,000
working papers
Eliminating Entries
Equity in S Co Profit 2,885,000
Dividend, S Co 400,000
Investment in S C0. 2,485,000

Share Cap, (beg) 2,500,000

Share Premium, (beg) 500,000
Retained Earnings, (beg) 700,000
COS 350,000
Other Expense 50,000
Land 500,000
Building 50,000
Equipment 100,000
Goodwill 450,000
Bond Payable 200,000
Investment in S C0., (beg) 5,000,000

Deprecation Expense 15,000

Accumulated Deprecation - Building 5,000
Accumulated Deprecation - Equipment 10,000

Bonds Payable 40,000

Other Expense 40,000
Consolidatied

45,000,000
27,350,000
17,650,000
1,015,000
7,210,000
-
9,425,000

1,250,000
9,425,000
1,000,000
9,675,000

8,900,000
-
5,350,000
-
6,000,000
6,250,000
(625,000)
3,900,000
(390,000)
-
450,000
29,835,000

10,160,000
9,000,000
1,000,000
9,675,000
29,835,000
 Date (2016)
Book Value During the year
P Co S Co
Cash 6,250,000 2,650,000
During the year
Inventory 3,500,000 1,850,000

Land 3,500,000 2,000,000 Dec-31

Building 4,000,000 2,200,000
Accumulated Deprecation - Building (400,000) (220,000)
Equipment 2,600,000 1,200,000
Accumulated Deprecation - Equipment (260,000) (120,000) During the year
Investment in S C0. 7,485,000 -
26,675,000 9,560,000

During the year

Bond Payable 7,000,000 3,000,000
Share Cap 9,000,000 2,500,000
Share Premium 1,000,000 500,000 During the year
Retained Earnings 9,675,000 3,560,000
26,675,000 9,560,000
Jan-01

During the year

100%
Books Of P Co.
Account Title Dr Cr Date (2016)
Cash 35,000,000 During the year
Sales 35,000,000

COS 21,000,000 During the year

Inventory 21,000,000

Deprecation Expense 660,000 Dec-31

Accumulated Deprecation - Building 400,000
Accumulated Deprecation - Equipment 260,000

Other Expenses 5,600,000 During the year

Cash 5,600,000

Inventory 21,000,000 During the year

Cash 21,000,000

Retained Earnings 1,000,000 During the year

Cash 1,000,000

Jan-01

Investment in S C0. 4,460,000

Equity in S Co Profit 4,460,000

Cash 400,000
Investment in S C0. 400,000

Investment in S C0. 25,000

Equity in S Co Profit 25,000

Closing Entries
Sales 35,000,000
Equity in S Co Profit 4,485,000
COS 21,000,000
Depreciation Expense 660,000
Other Expenses 5,600,000
Retained Earnings 12,225,000
39,485,000 39,485,000
B00ks of S. Co
Account Title Dr Cr
Cash 20,000,000
Sales 20,000,000

COS 12,000,000
Inventory 12,000,000

Deprecation Expense 340,000

Accumulated Deprecation - Building 220,000
Accumulated Deprecation - Equipment 120,000

Other Expenses 3,200,000

Cash 3,200,000

Inventory 12,000,000
Cash 12,000,000

Retained Earnings 400,000

Cash 400,000

Closing Entries
Sales 20,000,000
COS 12,000,000
Depreciation Expense 340,000
Other Expenses 3,200,000
Retained Earnings 4,460,000
 P Co S Co Adjustment and Elimination
Statement of Profit or Loss DR CR
Sales 35,000,000 20,000,000
COS 21,000,000 12,000,000
Gross Profit 14,000,000 8,000,000
Deprecation Expense 660,000 340,000 15,000
Other Expenses 5,600,000 3,200,000 40,000
Equity in S Co Profit 4,485,000 4,485,000
Net Income 12,225,000 4,460,000

Statement of Retained Earnings

Retained Earnings, beg 9,675,000 3,560,000 3,560,000
Net Income 12,225,000 4,460,000
Dividend 1,000,000 400,000 400,000
Retained Earnings, End 20,900,000 7,620,000

Cash 14,050,000 7,050,000

Trade and Other Receivable
Inventory 3,500,000 1,850,000

Land 3,500,000 2,000,000 500,000

Building 4,000,000 2,200,000 50,000
Accumulated Deprecation - Building (800,000) (440,000) 10,000
Equipment 2,600,000 1,200,000 100,000
Accumulated Deprecation - Equipment (520,000) (240,000) 20,000
Investment in S C0. 11,570,000 11,570,000
Goodwill 450,000
total Assets 37,900,000 13,620,000

Trade and Other Payables

Bond Payable 7,000,000 3,000,000 40,000 160,000
Share Cap 9,000,000 2,500,000 2,500,000
Share Premium 1,000,000 500,000 500,000
Retained Earnings 20,900,000 7,620,000
37,900,000 13,620,000

Eliminating Entries
Equity in S Co Profit 4,485,000
Dividend, S Co 400,000
Investment in S C0. 4,085,000

Share Cap, (beg) 2,500,000

Share Premium, (beg) 500,000
Retained Earnings, (beg) 3,560,000
Land 500,000
Building 50,000
Equipment 100,000
Goodwill 450,000
Bond Payable 160,000
Investment in S C0., (beg) 7,485,000
Accumulated Deprecation - Building 5,000
Accumulated Deprecation - Equipment 10,000

Deprecation Expense 15,000

Accumulated Deprecation - Building 5,000
Accumulated Deprecation - Equipment 10,000

Bonds Payable 40,000

Other Expense 40,000
Consolidatied

55,000,000
33,000,000
22,000,000
1,015,000
8,760,000
-
12,225,000

9,675,000
12,225,000
1,000,000
20,900,000

21,100,000
-
5,350,000

6,000,000
6,250,000
(1,250,000)
3,900,000
(780,000)
-
450,000
41,020,000

10,120,000
9,000,000
1,000,000
20,900,000
41,020,000
 Book Value FV
P Co S Co S Co.
Cash 5,500,000 200,000 200,000
Trade and Other Receivable
Inventory 2,000,000 850,000 1,200,000
Other Current Assets 650,000 250,000 300,000
Land 3,500,000 2,000,000 2,500,000
Building 4,000,000 2,200,000 2,250,000
Equipment 2,600,000 1,200,000 1,300,000
total Assets 18,250,000 6,700,000 7,750,000

Trade and Other Payables

Bond Payable 7,000,000 3,000,000 3,200,000
Share Cap 9,000,000 2,500,000
Share Premium 1,000,000 500,000
Retained Earnings 1,250,000 700,000
18,250,000 6,700,000

ALLOCATION OF EXCESS TO IA&L

FV Book Value
S Co. S Co Excess
Cash 200,000 200,000 -
Trade and Other Receivable 0 0 -
Inventory 1,200,000 850,000 350,000
Other Current Assets 300,000 250,000 50,000
Land 2,500,000 2,000,000 500,000
Building 2,250,000 2,200,000 50,000
Equipment 1,300,000 1,200,000 100,000
Trade and Other Payables 0 0 -
Bond Payable 3,200,000 3,000,000 (200,000)
Amount allocated to Identifiable Assets and Liabilities 850,000
Goodwill 450,000
Excess 1,300,000

Consideration Transferred 4,000,000 80%

NCI 1,000,000 20%
Total 5,000,000
Less: FV Of NET ASSET 4,550,000
Goodwill 450,000

Excess/ Differencial
Fair Value as a Whole 5,000,000
Book Value 3,700,000
1,300,000
 Books Of P Co.
Date (2016) Account Title Dr Cr
During the year Cash 30,000,000
Sales 30,000,000

During the year COS 18,000,000

Inventory 18,000,000

Dec-31 Deprecation Expense 660000

Accumulated Deprecation - Building 400000
Accumulated Deprecation - Equipment 260000

During the year Other Expenses 4,800,000

Cash 4,150,000
Other Current Assets 650,000

During the year Inventory 19,500,000

Cash 19,500,000

During the year Retained Earnings 1,000,000

Cash 1,000,000
dividend paid
Acquired Jan-01 Investment in S C0. 4,000,000
Cash 4,000,000
During the year
80% Investment in S C0. 2608000
Equity in S Co Profit 2608000
3260,000x80%
div income Cash 320000
Investment in S C0. 320000
400,000*80%
amortization Equity in S Co Profit 300,000
Investment in S C0. 300,000
375,000*80%
Closing Entries
Sales 30,000,000
Equity in S Co Profit 2,308,000
COS 18,000,000
Depreciation Expense 660000
Other Expenses 4,800,000
Retained Earnings 8,848,000

Schedule of Amortization of Excess

 Original Amount Year 1
cr Trade and Other Receivable - -
dr Inventory 350,000 (350,000)
dr Other Current Assets 50,000 (50,000)
dr Land 500,000
dr 10 Building 50,000 (5,000)
dr 10 Equipment 100,000 (10,000)
cr Trade and Other Payables - -
cr 5 Bond Payable (200,000) 40,000
Goodwill 450,000
dr 1,300,000 (375,000)

equity method

cost method
 B00ks of S. Co
Date (2016) Account Title Dr Cr
During the year Cash 15,000,000
Sales 15,000,000

During the year COS 9,000,000

Inventory 9,000,000

Dec-31 Deprecation Expense 340,000

Accumulated Deprecation - Building 220,000
Accumulated Deprecation - Equipment 120,000

During the year Other Expenses 2,400,000

Cash 2,150,000
Other Current Assets 250,000

During the year Inventory 10,000,000

Cash 10,000,000

During the year Retained Earnings 400,000

Cash 400,000

Closing Entries
Sales 15,000,000
COS 9,000,000
Depreciation Expense 340,000
Other Expenses 2,400,000
Retained Earnings 3,260,000
Year 2-5 Year 6-10
collect
sold
expired
sold
(5,000) (5,000) depre/sold
(10,000) (10,000) depre/sold
paid
40,000 5
impairment
25,000 (15,000)

Investment in subsidiary
beg end
acquisition declared
Share in NI Share in NL
Amort Amort
sold

Investment in subsidiary
beg end
acquisition
 P Co S Co Adjustment and Elimination
Statement of Profit or Loss DR CR
Sales 30,000,000 15,000,000
COS 18,000,000 9,000,000 350,000
Gross Profit 12,000,000 6,000,000
Deprecation Expense 660,000 340,000 15,000
Other Expenses 4,800,000 2,400,000 50,000 40,000
Equity in S Co Profit 2,308,000 2,308,000
Net Income 8,848,000 3,260,000
NCI Net Income
Controllling Interest

Statement of Retained Earnings

Retained Earnings, beg 1,250,000 700,000 700,000
Net Income 8,848,000 3,260,000
Less: Dividend 1,000,000 400,000 320,000
Retained Earnings, end 9,098,000 3,560,000

Cash 7,170,000 2,650,000

Trade and Other Receivable
Inventory 3,500,000 1,850,000
Other Current Assets - -
Land 3,500,000 2,000,000 500,000
Building 4,000,000 2,200,000 50,000
Accumulated Deprecation - Building (400,000) (220,000) 5,000
Equipment 2,600,000 1,200,000 100,000
Accumulated Deprecation - Equipment (260,000) (120,000) 10,000
Investment in Subsidiary 5,988,000 5,988,000
Goodwill 450,000
total Assets 26,098,000 9,560,000

Trade and Other Payables

Bond Payable 7,000,000 3,000,000 40,000 200,000
Share Cap 9,000,000 2,500,000 2,500,000
Share Premium 1,000,000 500,000 500,000
Retained Earnings 9,098,000 3,560,000
NCI, beginning 1,000,000
NCI, ending
26,098,000 9,560,000
Eliminating Entries
Equity in S Co Profit 2,308,000
Dividend, S Co 320,000 RE
Investment in S C0. 1,988,000 end beg
Dividend NI
Share Cap, (beg) 2,500,000
Share Premium, (beg) 500,000
Retained Earnings, (beg) 700,000
COS 350,000
Other Expense 50,000
Land 500,000
Building 50,000
Equipment 100,000
Goodwill 450,000
Bond Payable 200,000
Investment in S C0., (beg) 4,000,000
NCI 1,000,000

Deprecation Expense 15,000

Accumulated Deprecation - Building 5,000
Accumulated Deprecation - Equipment 10,000

Bonds Payable 40,000

Other Expense 40,000
NCI Consolidatied

45,000,000
27,350,000
17,650,000
1,015,000
7,210,000
-
9,425,000
577,000 (577,000)
8,848,000

1,250,000
8,848,000
(80,000) 1,000,000
9,098,000

9,820,000
-
5,350,000
-
6,000,000
6,250,000
(625,000)
3,900,000
(390,000)
-
450,000
30,755,000

10,160,000
9,000,000
1,000,000
9,098,000
1,000,000
1,497,000 1,497,000
30,755,000
 Date (2016)
Book Value During the year
P Co S Co
Cash 7,170,000 2,650,000
- - During the year
Inventory 3,500,000 1,850,000
- -
Land 3,500,000 2,000,000 Dec-31
Building 4,000,000 2,200,000
Accumulated Deprecation - Building (400,000) (220,000)
Equipment 2,600,000 1,200,000
Accumulated Deprecation - Equipment (260,000) (120,000) During the year
Investment in S C0. 5,988,000 -
26,098,000 9,560,000

During the year

Bond Payable 7,000,000 3,000,000
Share Cap 9,000,000 2,500,000
Share Premium 1,000,000 500,000 During the year
Retained Earnings 9,098,000 3,560,000
26,098,000 9,560,000

During the year

80%
Books Of P Co.
Account Title Dr Cr Date (2016)
Cash 35,000,000 During the year
Sales 35,000,000

COS 21,000,000 During the year

Inventory 21,000,000

Deprecation Expense 660,000 Dec-31

Accumulated Deprecation - Building 400,000
Accumulated Deprecation - Equipment 260,000

Other Expenses 5,600,000 During the year

Cash 5,600,000

Inventory 21,000,000 During the year

Cash 21,000,000

Retained Earnings 1,000,000 During the year

Cash 1,000,000

Dec,- 31
Investment in S C0. 3,568,000
Equity in S Co Profit 3,568,000

Cash 320,000
Investment in S C0. 320,000

Investment in S C0. 20,000

Equity in S Co Profit 20,000

Closing Entries
Sales 35,000,000
Equity in S Co Profit 3,588,000
COS 21,000,000
Depreciation Expense 660,000
Other Expenses 5,600,000
Retained Earnings 11,328,000
38,588,000 38,588,000
B00ks of S. Co
Account Title Dr Cr
Cash 20,000,000
Sales 20,000,000

COS 12,000,000
Inventory 12,000,000

Deprecation Expense 340,000

Accumulated Deprecation - Building 220,000
Accumulated Deprecation - Equipment 120,000

Other Expenses 3,200,000

Cash 3,200,000

Inventory 12,000,000
Cash 12,000,000

Retained Earnings 400,000

Cash 400,000

Closing Entries
Sales 20,000,000
COS 12,000,000
Depreciation Expense 340,000
Other Expenses 3,200,000
Retained Earnings 4,460,000
 P Co S Co Adjustment and Elimination
Statement of Profit or Loss DR CR
Sales 35,000,000 20,000,000
COS 21,000,000 12,000,000
Gross Profit 14,000,000 8,000,000
Deprecation Expense 660,000 340,000 15,000
Other Expenses 5,600,000 3,200,000 40,000
Equity in S Co Profit 3,588,000 3,588,000
Net Income 11,328,000 4,460,000
NCI
Controlling Interest

Statement of Retained Earnings

Retained Earnings, beg 9,098,000 3,560,000 3,560,000
Net Income 11,328,000 4,460,000
Dividend 1,000,000 400,000 320,000
19,426,000 7,620,000

Cash 14,890,000 7,050,000

Trade and Other Receivable
Inventory 3,500,000 1,850,000

Land 3,500,000 2,000,000 500,000

Building 4,000,000 2,200,000 50,000
Accumulated Deprecation - Building (800,000) (440,000) 10,000
Equipment 2,600,000 1,200,000 100,000
Accumulated Deprecation - Equipment (520,000) (240,000) 20,000
Investment in S C0. 9,256,000 9,256,000
Goodwill 450,000
total Assets 36,426,000 13,620,000

Trade and Other Payables

Bond Payable 7,000,000 3,000,000 40,000 160,000
Share Cap 9,000,000 2,500,000 2,500,000
Share Premium 1,000,000 500,000 500,000
Retained Earnings 19,426,000 7,620,000
NCI, beg 1,497,000
Nci, end
36,426,000 13,620,000
-
Eliminating Entries
Equity in S Co Profit 3,588,000
Dividend, S Co 320,000
Investment in S C0. 3,268,000

Share Cap, (beg) 2,500,000

Share Premium, (beg) 500,000
Retained Earnings, (beg) 3,560,000
Land 500,000
Building 50,000
Equipment 100,000
Goodwill 450,000
Bond Payable 160,000
Investment in S C0., (beg) 5,988,000
Accumulated Deprecation - Building 5,000
Accumulated Deprecation - Equipment 10,000
NCI, beg 1,497,000

Deprecation Expense 15,000

Accumulated Deprecation - Building 5,000
Accumulated Deprecation - Equipment 10,000

Bonds Payable 40,000

Other Expense 40,000
 NCI Consolidatied

55,000,000
33,000,000
22,000,000
1,015,000
8,760,000
-
12,225,000
897,000 (897,000)
11,328,000

9,098,000
11,328,000
(80,000) 1,000,000
19,426,000

21,940,000
-
5,350,000

6,000,000
6,250,000
(1,250,000)
3,900,000
(780,000)
-
450,000
41,860,000

10,120,000
9,000,000
1,000,000
19,426,000
1,497,000 -
2,314,000 2,314,000
41,860,000
 Book Value FV
P Co S Co S Co.
Cash 5,500,000 200,000 200,000
Trade and Other Receivable
Inventory 2,000,000 850,000 1,200,000
Other Current Assets 650,000 250,000 300,000
Land 3,500,000 2,000,000 2,500,000
Building 4,000,000 2,200,000 2,250,000
Equipment 2,600,000 1,200,000 1,300,000
total Assets 18,250,000 6,700,000 7,750,000

Trade and Other Payables

Bond Payable 7,000,000 3,000,000 3,200,000
Share Cap 9,000,000 2,500,000
Share Premium 1,000,000 500,000
Retained Earnings 1,250,000 700,000
18,250,000 6,700,000

ALLOCATION OF EXCESS TO IA&L

FV Book Value
S Co. S Co Excess
Cash 200,000 200,000 -
Trade and Other Receivable 0 0 - cr
Inventory 1,200,000 850,000 350,000 dr
Other Current Assets 300,000 250,000 50,000 dr
Land 2,500,000 2,000,000 500,000 dr
Building 2,250,000 2,200,000 50,000 dr
Equipment 1,300,000 1,200,000 100,000 dr
Trade and Other Payables 0 0 - cr
Bond Payable 3,200,000 3,000,000 (200,000) cr
Amount allocated to Identifiable Assets and Liabilities 850,000
Goodwill 450,000 dr
Excess 1,300,000

Consideration Transferred 5,000,000

NCI 0
Total 5,000,000
Less: FV Of NET ASSET 4,550,000
Goodwill 450,000

Fair Value as a Whole 5,000,000

Book Value 3,700,000
Excess/ Differencial 1,300,000
 Books Of P Co.
Date (201Account Title Dr Cr
During thCash 30,000,000
Sales 30,000,000

During thCOS 18,000,000

Inventory 18,000,000

Dec-31 Deprecation Expense 660000

Accumulated Deprecation - Building 400000
Accumulated Deprecation - Equipment 260000

During thOther Expenses 4,800,000

Cash 4,150,000
Other Current Assets 650,000

During thInventory 19,500,000

Cash 19,500,000

During thRetained Earnings 1,000,000

Cash 1,000,000

Jan-01 Investment in S C0. 5,000,000

Cash 5,000,000
During the year
100%

Cash 400000
Dividend Income 400000

Closing Entries
Sales 30,000,000
Dividend Income 400000
COS 18,000,000
Depreciation Expense 660000
Other Expenses 4,800,000
Retained Earnings 6,940,000

Schedule of Amortization of Excess

Original Amount Year 1 Year 2-5

 Trade and Other Receivable - -
Inventory 350,000 (350,000)
Other Current Assets 50,000 (50,000)
Land 500,000
10 Building 50,000 (5,000) (5,000)
10 Equipment 100,000 (10,000) (10,000)
Trade and Other Payables - -
5 Bond Payable (200,000) 40,000 40,000
Goodwill 450,000
1,300,000 (375,000) 25,000
 B00ks of S. Co
Date (2016) Account Title Dr Cr
During the yeCash 15,000,000
Sales 15,000,000

During the yeCOS 9,000,000

Inventory 9,000,000

Dec-31 Deprecation Expense 340,000

Accumulated Deprecation - Building 220,000
Accumulated Deprecation - Equipment 120,000

During the yeOther Expenses 2,400,000

Cash 2,150,000
Other Current Assets 250,000

During the yeInventory 10,000,000

Cash 10,000,000

During the yeRetained Earnings 400,000

Cash 400,000

Jan-01

Closing Entries
Sales 15,000,000
COS 9,000,000
Depreciation Expense 340,000
Other Expenses 2,400,000
Retained Earnings 3,260,000

Year 6-10
 (5,000)
(10,000)

(15,000)
 P Co S Co Adjustment and Elimination
Statement of Profit or Loss DR CR
Sales 30,000,000 15,000,000
COS 18,000,000 9,000,000 350,000
Gross Profit 12,000,000 6,000,000
Deprecation Expense 660,000 340,000 15,000
Other Expenses 4,800,000 2,400,000 50,000 40,000
Dividend Income 400,000 400,000
Net Income 6,940,000 3,260,000

Statement of Retained Earnings

Retained Earnings, beg 1,250,000 700,000 700,000
Net Income 6,940,000 3,260,000
Dividend 1,000,000 400,000 400,000
Retained, End 7,190,000 3,560,000

Cash 6,250,000 2,650,000

Trade and Other Receivable
Inventory 3,500,000 1,850,000
Other Current Assets - -
Land 3,500,000 2,000,000 500,000
Building 4,000,000 2,200,000 50,000
Accumulated Deprecation - Buildin (400,000) (220,000) 5,000
Equipment 2,600,000 1,200,000 100,000
Accumulated Deprecation - Equipm (260,000) (120,000) 10,000
Invenstment in Subsidiary 5,000,000 5,000,000
Goodwill 450,000
total Assets 24,190,000 9,560,000

Trade and Other Payables

Bond Payable 7,000,000 3,000,000 40,000 200,000
Share Cap 9,000,000 2,500,000 2,500,000
Share Premium 1,000,000 500,000 500,000
Retained Earnings 7,190,000 3,560,000
24,190,000 9,560,000

Eliminating Entries
Dividend Income 400,000
Dividend, S Co 400,000

Share Cap, (beg) 2,500,000

Share Premium, (beg) 500,000
Retained Earnings, (beg) 700,000
COS 350,000
Other Expense 50,000
Land 500,000
Building 50,000
Equipment 100,000
Goodwill 450,000
Bond Payable 200,000
Investment in S C0., (beg) 5,000,000

Deprecation Expense 15,000

Accumulated Deprecation - Building 5,000
Accumulated Deprecation - Equipment 10,000

Bonds Payable 40,000

Other Expense 40,000
Consolidatied

45,000,000
27,350,000
17,650,000
1,015,000
7,210,000
-
9,425,000

DR CR
1,250,000 beg
9,425,000 NL NI
1,000,000 Divd
9,675,000

8,900,000
-
5,350,000
-
6,000,000
6,250,000
(625,000)
3,900,000
(390,000)
-
450,000
29,835,000

10,160,000
9,000,000
1,000,000
9,675,000
29,835,000
 Book Value
P Co S Co
Cash 6,250,000 2,650,000
- -
Inventory 3,500,000 1,850,000
- -
Land 3,500,000 2,000,000
Building 4,000,000 2,200,000
Accumulated Deprecation - Building (400,000) (220,000)
Equipment 2,600,000 1,200,000
Accumulated Deprecation - Equipment (260,000) (120,000)
Investment in S C0. 5,000,000 -
24,190,000 9,560,000

Bond Payable 7,000,000 3,000,000

Share Cap 9,000,000 2,500,000
Share Premium 1,000,000 500,000
Retained Earnings 7,190,000 3,560,000
24,190,000 9,560,000
 Books Of P Co.
Date (2016) Account Title Dr Cr
During the year Cash 35,000,000
Sales 35,000,000

During the year COS 21,000,000

Inventory 21,000,000

Dec-31 Deprecation Expense 660,000

Accumulated Deprecation - Building 400,000
Accumulated Deprecation - Equipment 260,000

During the year Other Expenses 5,600,000

Cash 5,600,000

During the year Inventory 21,000,000

Cash 21,000,000

During the year Retained Earnings 1,000,000

Cash 1,000,000

Jan-01

During the year

100% Cash 400,000
Dividend Income 400,000

Closing Entries
Sales 35,000,000
Dividend Income 400,000
COS 21,000,000
Depreciation Expense 660,000
Other Expenses 5,600,000
Retained Earnings 8,140,000
 B00ks of S. Co
Date (2016) Account Title Dr Cr
During the year Cash 20,000,000
Sales 20,000,000

During the year COS 12,000,000

Inventory 12,000,000

Dec-31 Deprecation Expense 340,000

Accumulated Deprecation - Building 220,000
Accumulated Deprecation - Equipment 120,000

During the year Other Expenses 3,200,000

Cash 3,200,000

During the year Inventory 12,000,000

Cash 12,000,000

During the year Retained Earnings 400,000

Cash 400,000

Jan-01

Closing Entries
Sales 20,000,000
COS 12,000,000
Depreciation Expense 340,000
Other Expenses 3,200,000
Retained Earnings 4,460,000

CEE

Investment in S C0., (beg) 2,485,000

Retained Earnings, P Co (BEG) 2,485,000
Equity method (end of 1st year) 7,485,000
Cost method (end of 1st year) 5,000,000
2,485,000

NI - S co 3,260,000
amort (375,000)
Dividend Income (400,000)
2,485,000
 P Co S Co Adjustment and Elimination
Statement of Profit or Loss DR CR
Sales 35,000,000 20,000,000
COS 21,000,000 12,000,000
Gross Profit 14,000,000 8,000,000
Deprecation Expense 660,000 340,000 15,000
Other Expenses 5,600,000 3,200,000 40,000
Dividend Income 400,000 400,000
Net Income 8,140,000 4,460,000

Statement of Retained Earnings

Retained Earnings, beg 7,190,000 3,560,000 3,560,000 2,485,000
Net Income 8,140,000 4,460,000
Dividend 1,000,000 400,000 400,000
14,330,000 7,620,000

Cash 14,050,000 7,050,000

Trade and Other Receivable
Inventory 3,500,000 1,850,000

Land 3,500,000 2,000,000 500,000

Building 4,000,000 2,200,000 50,000
Accumulated Deprecation - Building (800,000) (440,000) 10,000
Equipment 2,600,000 1,200,000 100,000
Accumulated Deprecation - Equipment (520,000) (240,000) 20,000
Investment in S C0. 5,000,000 2,485,000 7,485,000
Goodwill 450,000
total Assets 31,330,000 13,620,000

Trade and Other Payables

Bond Payable 7,000,000 3,000,000 40,000 160,000
Share Cap 9,000,000 2,500,000 2,500,000
Share Premium 1,000,000 500,000 500,000
Retained Earnings 14,330,000 7,620,000
31,330,000 13,620,000

Eliminating Entries

Dividend Income 400,000

Dividend, S Co 400,000

Share Cap, (beg) 2,500,000

Share Premium, (beg) 500,000
Retained Earnings, (beg) 3,560,000
Land 500,000
Building 50,000
Equipment 100,000
Goodwill 450,000
Bond Payable 160,000
Investment in S C0., (beg) 7,485,000
Accumulated Deprecation - Building 5,000
Accumulated Deprecation - Equipment 10,000

Deprecation Expense 15,000

Accumulated Deprecation - Building 5,000
Accumulated Deprecation - Equipment 10,000

Bonds Payable 40,000

Other Expense 40,000
Consolidatied

55,000,000
33,000,000
22,000,000
1,015,000
8,760,000
-
12,225,000

9,675,000
12,225,000
1,000,000
20,900,000

21,100,000
-
5,350,000

6,000,000
6,250,000
(1,250,000)
3,900,000
(780,000)
-
450,000
41,020,000
-

10,120,000
9,000,000
1,000,000
20,900,000
41,020,000
 Book Value FV
P Co S Co S Co.
Cash 5,500,000 200,000 200,000
Trade and Other Receivable
Inventory 2,000,000 850,000 1,200,000
Other Current Assets 650,000 250,000 300,000
Land 3,500,000 2,000,000 2,500,000
Building 4,000,000 2,200,000 2,250,000
Equipment 2,600,000 1,200,000 1,300,000
total Assets 18,250,000 6,700,000 7,750,000

Trade and Other Payables

Bond Payable 7,000,000 3,000,000 3,200,000
Share Cap 9,000,000 2,500,000
Share Premium 1,000,000 500,000
Retained Earnings 1,250,000 700,000
18,250,000 6,700,000

ALLOCATION OF EXCESS TO IA&L

FV Book Value
S Co. S Co Excess
Cash 200,000 200,000 -
Trade and Other Receivable 0 0 - cr
Inventory 1,200,000 850,000 350,000 dr
Other Current Assets 300,000 250,000 50,000 dr
Land 2,500,000 2,000,000 500,000 dr
Building 2,250,000 2,200,000 50,000 dr
Equipment 1,300,000 1,200,000 100,000 dr
Trade and Other Payables 0 0 - cr
Bond Payable 3,200,000 3,000,000 (200,000) cr
Amount allocated to Identifiable Assets and Liabilities 850,000
Goodwill 450,000 dr
Excess 1,300,000

Consideration Transferred 4,000,000 80%

NCI 1,000,000 20%
Total 5,000,000
Less: FV Of NET ASSET 4,550,000
Goodwill 450,000

Excess/ Differencial
Fair Value as a Whole 5,000,000
Book Value 3,700,000
1,300,000
 Books Of P Co.
Date (2016) Account Title Dr Cr
During the year Cash 30,000,000
Sales 30,000,000

During the year COS 18,000,000

Inventory 18,000,000

Dec-31 Deprecation Expense 660000

Accumulated Deprecation - Building 400000
Accumulated Deprecation - Equipment 260000

During the year Other Expenses 4,800,000

Cash 4,150,000
Other Current Assets 650,000

During the year Inventory 19,500,000

Cash 19,500,000

During the year Retained Earnings 1,000,000

Cash 1,000,000

Jan-01 Investment in S C0. 4,000,000

Cash 4,000,000
During the year
80% Cash 320000
Dividend Income 320000

Closing Entries
Sales 30,000,000
Dividend Income 320,000
COS 18,000,000
Depreciation Expense 660000
Other Expenses 4,800,000
Retained Earnings 6,860,000

Schedule of Amortization of Excess

Original Amount Year 1 Year 2-5

 Trade and Other Receivable - -
Inventory 350,000 (350,000)
Other Current Assets 50,000 (50,000)
Land 500,000
10 Building 50,000 (5,000) (5,000)
10 Equipment 100,000 (10,000) (10,000)
Trade and Other Payables - -
5 Bond Payable (200,000) 40,000 40,000
Goodwill 450,000
1,300,000 (375,000) 25,000
 B00ks of S. Co
Date (2016) Account Title Dr Cr
During the year Cash 15,000,000
Sales 15,000,000

During the year COS 9,000,000

Inventory 9,000,000

Dec-31 Deprecation Expense 340,000

Accumulated Deprecation - Building 220,000
Accumulated Deprecation - Equipment 120,000

During the year Other Expenses 2,400,000

Cash 2,150,000
Other Current Assets 250,000

During the year Inventory 10,000,000

Cash 10,000,000

During the year Retained Earnings 400,000

Cash 400,000

Closing Entries
Sales 15,000,000
COS 9,000,000
Depreciation Expense 340,000
Other Expenses 2,400,000
Retained Earnings 3,260,000

Year 6-10
 (5,000)
(10,000)

(15,000)
 P Co S Co Adjustment and Elimination
Statement of Profit or Loss DR CR
Sales 30,000,000 15,000,000
COS 18,000,000 9,000,000 350,000
Gross Profit 12,000,000 6,000,000
Deprecation Expense 660,000 340,000 15,000
Other Expenses 4,800,000 2,400,000 50,000 40,000
Dividend Income 320,000 320,000
Net Income 6,860,000 3,260,000
NCI Net Income
Controllling Interest

Statement of Retained Earnings

Retained Earnings, beg 1,250,000 700,000 700,000
Net Income 6,860,000 3,260,000
Dividend 1,000,000 400,000 320,000
7,110,000 3,560,000
Statement of Financial Position
Cash 7,170,000 2,650,000
Trade and Other Receivable
Inventory 3,500,000 1,850,000
Other Current Assets - -
Land 3,500,000 2,000,000 500,000
Building 4,000,000 2,200,000 50,000
Accumulated Deprecation - Building (400,000) (220,000) 5,000
Equipment 2,600,000 1,200,000 100,000
Accumulated Deprecation - Equipment (260,000) (120,000) 10,000
Investment in Subsidiary 4,000,000 4,000,000
Goodwill 450,000
total Assets 24,110,000 9,560,000

Trade and Other Payables

Bond Payable 7,000,000 3,000,000 40,000 200,000
Share Cap 9,000,000 2,500,000 2,500,000
Share Premium 1,000,000 500,000 500,000
Retained Earnings 7,110,000 3,560,000
NCI, beginning
NCI, ending
24,110,000 9,560,000
Eliminating Entries
Dividend Income 320,000
Dividend, S Co 320,000
Share Cap, (beg) 2,500,000
Share Premium, (beg) 500,000
Retained Earnings, (beg) 700,000
COS 350,000
Other Expense 50,000
Land 500,000
Building 50,000
Equipment 100,000
Goodwill 450,000
Bond Payable 200,000
Investment in S C0., (beg) 4,000,000
NCI 1,000,000

Deprecation Expense 15,000

Accumulated Deprecation - Building 5,000
Accumulated Deprecation - Equipment 10,000

Bonds Payable 40,000

Other Expense 40,000
NCI Consolidatied

45,000,000
27,350,000
17,650,000
1,015,000
7,210,000
-
9,425,000
577,000 (577,000)
8,848,000

1,250,000
8,848,000
(80,000) 1,000,000
9,098,000

9,820,000
-
5,350,000
-
6,000,000
6,250,000
(625,000)
3,900,000
(390,000)
-
450,000
30,755,000

10,160,000
9,000,000
1,000,000
9,098,000
1,000,000
1,497,000 1,497,000
30,755,000
 Book Value
P Co S Co
Cash 7,170,000 2,650,000
- -
Inventory 3,500,000 1,850,000
- -
Land 3,500,000 2,000,000
Building 4,000,000 2,200,000
Accumulated Deprecation - Building (400,000) (220,000)
Equipment 2,600,000 1,200,000
Accumulated Deprecation - Equipment (260,000) (120,000)
Investment in S C0. 4,000,000 -
24,110,000 9,560,000

Bond Payable 7,000,000 3,000,000

Share Cap 9,000,000 2,500,000
Share Premium 1,000,000 500,000
Retained Earnings 7,110,000 3,560,000
24,110,000 9,560,000
 Books Of P Co.
Date (2016) Account Title Dr Cr
During the year Cash 35,000,000
Sales 35,000,000

During the year COS 21,000,000

Inventory 21,000,000

Dec-31 Deprecation Expense 660,000

Accumulated Deprecation - Building 400,000
Accumulated Deprecation - Equipment 260,000

During the year Other Expenses 5,600,000

Cash 5,600,000

During the year Inventory 21,000,000

Cash 21,000,000

During the year Retained Earnings 1,000,000

Cash 1,000,000

During the year

80% Cash 320,000
Dividend Income 320,000

Closing Entries
Sales 35,000,000
Dividend Income 320,000
COS 21,000,000
Depreciation Expense 660,000
Other Expenses 5,600,000
Retained Earnings 8,060,000

35,320,000 35,320,000
 B00ks of S. Co
Date (2016) Account Title Dr
During the year Cash 20,000,000
Sales

During the year COS 12,000,000

Inventory

Dec-31 Deprecation Expense 340,000

Accumulated Deprecation - Building
Accumulated Deprecation - Equipment

During the year Other Expenses 3,200,000

Cash

During the year Inventory 12,000,000

Cash

During the year Retained Earnings 400,000

Cash

Dec,- 31 Closing Entries

Sales 20,000,000
COS
Depreciation Expense
Other Expenses
Retained Earnings

CEE
Investment in S C0. 1,988,000
Retained Earnings, Beg

3,260,000
(375,000)
(400,000)
2,485,000
1
1,988,000
Cr
P Co
20,000,000 Statement of Profit or Loss
Sales 35,000,000
COS 21,000,000
12,000,000 Gross Profit 14,000,000
Deprecation Expense 660,000
Other Expenses 5,600,000
220,000 Dividend Income 320,000
120,000 Net Income 8,060,000
NCI
Controlling Interest
3,200,000

Statement of Retained Earnings

Retained Earnings, beg 7,110,000
12,000,000 Net Income 8,060,000
Dividend 1,000,000
14,170,000
400,000
Cash 14,890,000
Trade and Other Receivable
Inventory 3,500,000

Land 3,500,000
12,000,000 Building 4,000,000
340,000 Accumulated Deprecation - Building (800,000)
3,200,000 Equipment 2,600,000
4,460,000 Accumulated Deprecation - Equipment (520,000)
Investment in S C0. 4,000,000
Goodwill
total Assets 31,170,000

Trade and Other Payables

Bond Payable 7,000,000
Share Cap 9,000,000
Share Premium 1,000,000
Retained Earnings 14,170,000
NCI, beg
Nci, end
31,170,000
-
Eliminating Entries
 Dividend Income 320,000
1,988,000 Dividend, S Co

Share Cap, (beg) 2,500,000

Share Premium, (beg) 500,000
Retained Earnings, (beg) 3,560,000
Land 500,000
Building 50,000
Equipment 100,000
Goodwill 450,000
Bond Payable
Investment in S C0., (beg)
Accumulated Deprecation - Building
Accumulated Deprecation - Equipment
NCI, beg

Deprecation Expense 15,000

Accumulated Deprecation - Building
Accumulated Deprecation - Equipment

Bonds Payable 40,000

Other Expense
S Co Adjustment and Elimination NCI Consolidatied
DR CR
20,000,000 55,000,000
12,000,000 33,000,000
8,000,000 22,000,000
340,000 15,000 1,015,000
3,200,000 40,000 8,760,000
320,000 -
4,460,000 12,225,000
897,000 (897,000)
11,328,000

3,560,000 3,560,000 1,988,000 9,098,000

4,460,000 11,328,000
400,000 320,000 (80,000) 1,000,000
7,620,000 19,426,000

7,050,000 21,940,000
-
1,850,000 5,350,000

2,000,000 500,000 6,000,000

2,200,000 50,000 6,250,000
(440,000) 10,000 (1,250,000)
1,200,000 100,000 3,900,000
(240,000) 20,000 (780,000)
1,988,000 5,988,000 -
450,000 450,000
13,620,000 41,860,000

3,000,000 40,000 160,000 10,120,000

2,500,000 2,500,000 9,000,000
500,000 500,000 1,000,000
7,620,000 19,426,000
1,497,000 1,497,000 -
2,314,000 2,314,000
13,620,000 41,860,000
 320,000

160,000
5,988,000
5,000
10,000
1,497,000

5,000
10,000

40,000
Carry Value of Assets
plant 40,000 plant
EQUIP 30,000 EQUIP
Goodwill 10,000 80,000
Recoverable Amount
Fair Value of Cash Generating Assets 65,000 Impairment loss
Value in Use of Cash Generating Assets 60,000 65,000 Goodwill
15,000 Plant

Discounted Cash flows

Inflow Revenue Disposal
Outflows Expense
FVLCTS CV
30,000 40,000 -10,000
30,000 30,000 0
70,000

15,000
10,000
5,000
P Company
carrying value of S Co's net asset - cash-generating unit 12,000,000.00 2,400,000.00
Goodwill 1,200,000.00
Carrying value of Cash-generating unit 13,200,000.00
Less: Recoverable amount 10,000,000.00
3,200,000.00

Impairment Loss 3,200,000.00

Goodwill 1,200,000.00
Identifiable net assets 2,000,000.00
9,600,000.00 carrying value of S Co's net asset - cash-generating unit 12,000,000.00
Goodwill attributable to Parent 1,000,000.00 80%
Goodwill attributable to NCI 250,000.00 20%
Carrying value of Cash-generating unit 13,250,000.00
Less: Recoverable amount 10,000,000.00
Impairment Loss 3,250,000.00

Write-off- GW - Parent 1,000,000.00

Write-off - GW - NCI 250,000.00

Impairment Loss 3,000,000.00

Goodwill 1,000,000.00
Identifiable net assets 2,000,000.00
 Parent NCI unrealized profit - ending inventory
Income - Parent xx Sales - Intercompany sales 100,000 100%
Income - Subs xx xx Cost 70,000 70%
Amoritization xx xx gross profit 30,000 30%
Dividend - Subs xx xx Subsidiary
Realized - US /DS xx xx Inventory 30,000 30%
unrealized profit - ending inventory 9000
Books of Parent books of subsidiary
Cash 100,000 inventory 100,000
Sales 100,000 cash 100,000

COS 70,000 Cash xx

Inventory 70,000 sales xx

Equity in S Co. Profit 9000 cos 70,000

Investment in Subs. 9000 Inventory 70,000

inventory, end 30,000