On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shares with a market price of P45 per share.
On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The
consideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shares
with a market price of P45 per share.
The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for the
following:
• Merchandise inventory’s fair value is lower than the book balance by 150,000.
• Equipment-A, with 2 years remaining useful life, costing P300,000 is understated by
P50,000.
• Land with a fair value of P500,000 is recognized in the books amounting to P350,000.
The following events happened to Luna Corp.
• Equipment-A was sold in June 30, 2023 for P320,000.
• 60% of merchandise inventory were sold in 2022.
• There is no movement as to the ordinary shares of Luna Corp during the year.
The unadjusted
Lucas Company Luna Corp
Cash 2,240,000 1,800,000
Trade Receivables 1,000,000 960,000
Merchandise Inventory 2,320,000 740,000
Furniture, net 820,000 540,000
Equipment, net 1,540,000 660,000
Land 880,000 3,000,000
Trademark, net 60,000 240,000
Investment in Luna 4,250,000
Cost of Good Sold 5,500,000 3,840,000
Expenses 3,240,000 1,620,000
Dividends Declared 1,280,000 1,920,000
TOTAL 23,130,000 15,320,000
Liabilities 1,570,000 1,700,000
Ordinary shares 3,600,000 2,700,000
Sales 10,730,000 7,940,000
Gain on sale of furniture 50,000 120,000
Dividend Income 1,980,000 1,000,000
TOTAL 23,130,000 15,320,000
1. How much is the consolidated net income attributable to parent in December 31, 2022?
a. 5,397,000
b. 5,428,875
c. 5,418,250
d. 5,386,375
2. How much is the consolidated net income attributable to non-controlling interest In
December 31, 2022?
a. 531,000
b. 536,625
c. 529,125
d. 534,750
3. How much is the consolidated shareholder’s equity as of December 31, 2022?
a. 12,938,250
b. 13,935,000
c. 10,335,000
d. 15,215,000
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