AAA acquired a 70% interest in BBB on January 2, 20x1 for $468,000 when BBB net assets had a book value and fair value of $790,000. During 20x1, AAA sold inventory items that cost $780,000 to BBB for $1,040,000 and BBB's inventory at December 31, 20x1 included 1/2 of the merchandise. BBB also sold to AAA an inventory for $15,000 with a cost of $12,500, 70% were sold to unaffiliated customers. AAA reported separate income from its own operation of $585,000 and BBB reported a net loss of P390,000. Compute for the consolidated net income.
AAA acquired a 70% interest in BBB on January 2, 20x1 for $468,000 when BBB net assets had a book value and fair value of $790,000. During 20x1, AAA sold inventory items that cost $780,000 to BBB for $1,040,000 and BBB's inventory at December 31, 20x1 included 1/2 of the merchandise. BBB also sold to AAA an inventory for $15,000 with a cost of $12,500, 70% were sold to unaffiliated customers. AAA reported separate income from its own operation of $585,000 and BBB reported a net loss of P390,000. Compute for the consolidated net income.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
AAA acquired a 70% interest in BBB on January 2, 20x1 for $468,000 when BBB net assets had a book value and fair value of $790,000. During 20x1, AAA sold inventory items that cost $780,000 to BBB for $1,040,000 and BBB's inventory at December 31, 20x1 included 1/2 of the merchandise. BBB also sold to AAA an inventory for $15,000 with a cost of $12,500, 70% were sold to unaffiliated customers. AAA reported separate income from its own operation of $585,000 and BBB reported a net loss of P390,000. Compute for the consolidated net income.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education