8. Accountancy Company acquired 75% of outstanding ordinary shares of Finance Company for P900,000. Book value of Finance Company's net assets is P1,000,000. Upon re-measurement of acquires net assets, it shows that inventory has a fair value lower by P40,000 than its book value and equipment held for 3 years has a fair value and book value of P450,000 and P360,000, respectively. The original cost of Finance Company's equipment is P576,000 with no residual value. Accountancy opt to measure NCI at fair value of P275,000. During the year Accountancy reported net income from own operation of P300,000 and received P30,000 dividend from Finance. Finance Company's net income amounts to P120,000. Goodwill, if partial, is impaired by P13,500. Compute the consolidated net income. a. P424,000 b. P439,000 c. P427,000 d. P394,000

8. Accountancy Company acquired 75% of outstanding ordinary shares of Finance Company for P900,000. Book value of Finance Company's net assets is P1,000,000. Upon re-measurement of acquires net assets, it shows that inventory has a fair value lower by P40,000 than its book value and equipment held for 3 years has a fair value and book value of P450,000 and P360,000, respectively. The original cost of Finance Company's equipment is P576,000 with no residual value. Accountancy opt to measure NCI at fair value of P275,000. During the year Accountancy reported net income from own operation of P300,000 and received P30,000 dividend from Finance. Finance Company's net income amounts to P120,000. Goodwill, if partial, is impaired by P13,500. Compute the consolidated net income. a. P424,000 b. P439,000 c. P427,000 d. P394,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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