1. Goodwill arising from business combination on January 1, 2018 isA. 15,840 B. 25,000 C. 84,000 D. 110,2002. How much of the goodwill is attributable to the parent and non-controlling interest, respectively?A. 15,840; 9,160 B. 15,840; 0 C. 84,000; 26,200 D. 191,840; 47,9603. How much is the (1) operating income and (2) net income of the parent for the year ended 2018?A. (1) 196,800; (2) 196,800B. (1) 168,000; (2) 168,000C. (1) 196,800; (2) 168,000D. (1) 168,000; (2) 196,8004. How much is the consolidated net income for the year 2018?A. 203,232 B. 211,000 C. 239,800 D. 256,8005. How much of the 2018 consolidated net income is attributable to the parent and non-controlling interest, respectively?A. 202,400; 8,600 B. 168,800; 42,200 C. 203,232; 7,768 D. 191,840; 47,960PLEASE SHOW SOLUTIONS were all sold during 2018 and FIFO inventory costing is used.Goodwill, if any, is impaired by P5,000 during 2018. The investmentis to be accounted for using the cost method.Both entities did not issue additional shares during 2018. Trialbalances for the legal entities for the year ended 2018 are asfollows:Powell CompanyDebit232,800Scarlett CompanyCreditDebitCredit90,00060,00090.00048,00084,000CashAccounts receivable, net90.000Inventory, 12/31/2018Land120,000210.000Equipment, netBuilding, netInvestment in ScariettAccounts PayableBond PayableCommon stock, P10 parRetained earnings, 1/1/18Dividends105.000315,000252.000372,000120,000120,000240,000120,000600,000240,000120,000360,00072,00036,000480,000240,000SalesDividend revenue28,800204,000108,000138,00042,000Cost of goods soldOperating expense1.828.800 1.828,800 840,000 840,000The trial balances for the legal entities for the year ended 2019 areas follows:Powell CompanyScarlett CompanyCreditDebitCreditDebit102,00096,000108,00050,00048,00078,000234,000CashAccounts receivable, net189,000180,000Inventory, 12/31/2019Trading securitiesLandEquipment, netBuilding, net216,000100,000210,00090,000270,000372,000Investment in ScarlettAccounts PayableBond PayableCommon stock, P10 parRetained earnings, 1/1/19Dividends140,000240,000600,000200,000120,000240,000144,000484,80072,00048,000540,00048,000360,0005,000SalesDividend revenueCost of goods soldOperating expense216,000137,800192,000113,0002.052.800 2,052.800 1.069.000 1.069.000 On January 1, 2018, Powell Company acquires 80%of the commonstock of Scarlett Company for P372,000. At that time, ScarlettCompany's shareholders' equity is composed of common stock (P10par), P240,000 and retained earnings, P120,000. Also, the fair valueof the non-controlling interest is P98,200. On the same date, thefollowing assets of Scarlett Company had carrying values that weredifferent from their respective fair values:InventoryLandEquipment, netBuilding, netCarrying value:24,00048,00084,000168,000Fair value:30,00055,200180,000144,00Other assets and all liabilities of Scarlett Company had carryingvalues approximately equal to their respective fair values.On January 1, 2018, the equipment and building had a remaininglife of 8 and 4 years, respectively. The inventories of January 1, 2018were all sold during 2018 and FIFO inventory costing is used.Goodwill, if any, is impaired by P5,000 during 2018. The investmentis to be accounted for using the cost method.Both entities did not issue additional shares during 2018. Trialbalances for the legal entities for the year ended 2018 are asfollows:Powell CompanyCreditScarlett CompanyDebitDebitCreditCash232,80090,000Accounts receivable, netInventory, 12/31/2018Land90,000120,000210,000105,00060,00090,00048,00084,000252,000Equipment, netBuilding, netInvestment in Scarlett315,000372,000Accounts PayableBond Payable120,000240,000120,000120,000Common stock, P10 parRetained earnings, 1/1/18600,000240,000360,000120,000Dividends72,00036,000SalesDividend revenue480,000240,00028 800

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On January 1, 2018, Powell Company acquires 80% of the common stock of Scarlett Company for P372,000. At that time, Scarlett Company's shareholders' equity is composed of common stock (P10 par), P240,000 and retained earnings, P120,000. Also, the fair value

On January 1, 2018, Powell Company acquires 80% of the common stock of Scarlett Company for P372,000. At that time, Scarlett Company's shareholders' equity is composed of common stock (P10 par), P240,000 and retained earnings, P120,000. Also, the fair value

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 18E

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