Below are the Statements of Comprehensive Income of Riego and Mercadejas Companies for 2020. Riego Company's Statement of Comprehensive Income was prepared before it reported its share of Mercadejas Company's income. Riego Company uses the equity method. Sales Cost of sales Gross profit Operating Expenses Net Income Inventories, 1/1/20: Purchased from outsiders Purchased intercompany Inventories, 12/31/20: Mercadejas Co. 200,000 90,000 110,000 60,000 50,000 15,000 Riego Co. 800,000 320,000 480,000 380,000 100,000 20,000 10,000
Below are the Statements of Comprehensive Income of Riego and Mercadejas Companies for 2020. Riego Company's Statement of Comprehensive Income was prepared before it reported its share of Mercadejas Company's income. Riego Company uses the equity method. Sales Cost of sales Gross profit Operating Expenses Net Income Inventories, 1/1/20: Purchased from outsiders Purchased intercompany Inventories, 12/31/20: Mercadejas Co. 200,000 90,000 110,000 60,000 50,000 15,000 Riego Co. 800,000 320,000 480,000 380,000 100,000 20,000 10,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Below are the Statements of Comprehensive Income of Riego and Mercadejas Companies for
2020. Riego Company's Statement of Comprehensive Income was prepared before it
reported its share of Mercadejas Company's income. Riego Company uses the equity method.
Mercadejas Co.
Riego Co.
800,000
320,000
480,000
380,000
100,000
Sales
Cost of sales
Gross profit
Operating Expenses
Net Income
Inventories, 1/1/20:
Purchased from outsiders
Purchased intercompany
Inventories, 12/31/20:
Purchased from outsiders
Purchased intercompany
200,000
90,000
110,000
60,000
50,000
15,000
20,000
10,000
25,000
5,000
5,000
The gross profit rate, as a percentage of sales, has been stable for several years and 60% of
Mercadejas Company's sales are to Riego Company. 75% of Mercadejas Company's was
acquired by Riego Company some time ago at book value. Mercadejas Company's equity at
December 31, 2020 consisted of P20,000 of capital stock and P60,000 of retained earnings.
REQUIRED:
Compute the amount of the following in the consolidated financial statements
on December 31, 2020:
a. Inventories
b. Investment in Mercadejas Company
c. Investment Income
d. NCI in Mercadejas Company's Net Income](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F894bdf24-0c9c-43db-b9aa-e938851cce9d%2Ffa2206a2-4a4f-4d72-aeda-2982128375e6%2Fl0al0nf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Below are the Statements of Comprehensive Income of Riego and Mercadejas Companies for
2020. Riego Company's Statement of Comprehensive Income was prepared before it
reported its share of Mercadejas Company's income. Riego Company uses the equity method.
Mercadejas Co.
Riego Co.
800,000
320,000
480,000
380,000
100,000
Sales
Cost of sales
Gross profit
Operating Expenses
Net Income
Inventories, 1/1/20:
Purchased from outsiders
Purchased intercompany
Inventories, 12/31/20:
Purchased from outsiders
Purchased intercompany
200,000
90,000
110,000
60,000
50,000
15,000
20,000
10,000
25,000
5,000
5,000
The gross profit rate, as a percentage of sales, has been stable for several years and 60% of
Mercadejas Company's sales are to Riego Company. 75% of Mercadejas Company's was
acquired by Riego Company some time ago at book value. Mercadejas Company's equity at
December 31, 2020 consisted of P20,000 of capital stock and P60,000 of retained earnings.
REQUIRED:
Compute the amount of the following in the consolidated financial statements
on December 31, 2020:
a. Inventories
b. Investment in Mercadejas Company
c. Investment Income
d. NCI in Mercadejas Company's Net Income
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