ABC Company paid P2,000,000 for a 70% interest in XYZ Co. on January 1, 2022. ABC Company elected to measure non-controlling interests at its proportionate share in the net asset of XYZ Company. On the date of acquisition, the shareholders’ equity of ABC Co. and XYZ Co. are as follows: ABC Co. XYZ Co. Share capital P7,500,000 P2,500,000 Share premium 2,000,000 600,000 Retained earnings 1,700,000 600,000 All the assets and liabilities of XYZ Co. approximate their fair values except for the following: Carrying value Fair value Inventories (all sold in 2022) P 750,000 P 900,000 Land 1,200,000 1,500,000 Building (5 years remaining life) 1,800,000 2,300,000 Investment in subsidiary is carried using the cost model. During the year, ABC Co. transferred merchandise costing P350,000 to XYZ Co. at a 20% gross profit. XYZ Co. reported that 25% of this shipment was unsold at the end of 2022. The following financial information at the end of the year are reported in the separate financial statements of both companies: ABC Co. XYZ Co. Net income P450,000 P300,000 Dividends 300,000 225,000 How much is the consolidated net income attributable to the parent for 2022? How much is the consolidated net income attributable to non-controlling interests for 2022? How much is the consolidated retained earnings as of December 31, 2022?
ABC Company paid P2,000,000 for a 70% interest in XYZ Co. on January 1, 2022. ABC Company elected to measure non-controlling interests at its proportionate share in the net asset of XYZ Company. On the date of acquisition, the shareholders’ equity of ABC Co. and XYZ Co. are as follows:
|
|
ABC Co. |
XYZ Co. |
|
Share capital |
P7,500,000 |
P2,500,000 |
|
Share premium |
2,000,000 |
600,000 |
|
|
1,700,000 |
600,000 |
All the assets and liabilities of XYZ Co. approximate their fair values except for the following:
|
|
Carrying value |
Fair value |
|
Inventories (all sold in 2022) |
P 750,000 |
P 900,000 |
|
Land |
1,200,000 |
1,500,000 |
|
Building (5 years remaining life) |
1,800,000 |
2,300,000 |
Investment in subsidiary is carried using the cost model. During the year, ABC Co. transferred merchandise costing P350,000 to XYZ Co. at a 20% gross profit. XYZ Co. reported that 25% of this shipment was unsold at the end of 2022.
The following financial information at the end of the year are reported in the separate financial statements of both companies:
|
|
ABC Co. |
XYZ Co. |
|
Net income |
P450,000 |
P300,000 |
|
Dividends |
300,000 |
225,000 |
- How much is the consolidated net income attributable to the parent for 2022?
- How much is the consolidated net income attributable to non-controlling interests for 2022?
- How much is the consolidated retained earnings as of December 31, 2022?
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