Determine the correct amount of consolidated net income for 2023.Do not forget the correction that is stated below the problem and include if there is any upstream and downstream. ABC acquired 80% interest in STU in 2021 at a time when STU's book valuesand fair values were equal. In 2022, STU sold land to ABC for P82,000 thatcost P72,000. The land remained in ABC's possession until 2023 when ABCsold it outside the combined entity for P102,000. After the books wereclosed in 2023, it was discovered that ABC had not considered theunrealized gain from its intercompany purchase of land in preparingconsolidated financial statements. The only entry on ABC's book was a debitto Land and a credit to Cash in 2022 for P82,000 and in 2023 a debit to cashfor P102,000 and credit to Land for P82,000 and gain on sale of land forP20,000. Before the discovery of the error, the consolidated financialstatements disclosed the following amounts: Consolidated net incomeP750,000, P600,000 and P910,000 for 2021, 2022, and 2023 respectively.Land P200,000, P240,000 and P300,000 for 2021, 2022, and 2023respectively. Determine the correct amount of consolidated net income for2023.**PLEASE CHECK CORRECTION (The only entry on ABC's book was a debit to Land and a credit to Cash in2022 for P82,000 and in 2023 a debit to cash for P102,000 and credit to Land for P82,000 and gain on sale ofland for P20,000.)

Consolidated financial statement:- Consolidated financial statements are financial statements of an…

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Business

Accounting

Determine the correct amount of consolidated net income for 2023

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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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

Determine the correct amount of consolidated net income for 2023.

Do not forget the correction that is stated below the problem and include if there is any upstream and downstream.

ABC acquired 80% interest in STU in 2021 at a time when STU's book values
and fair values were equal. In 2022, STU sold land to ABC for P82,000 that
cost P72,000. The land remained in ABC's possession until 2023 when ABC
sold it outside the combined entity for P102,000. After the books were
closed in 2023, it was discovered that ABC had not considered the
unrealized gain from its intercompany purchase of land in preparing
consolidated financial statements. The only entry on ABC's book was a debit
to Land and a credit to Cash in 2022 for P82,000 and in 2023 a debit to cash
for P102,000 and credit to Land for P82,000 and gain on sale of land for
P20,000. Before the discovery of the error, the consolidated financial
statements disclosed the following amounts: Consolidated net income
P750,000, P600,000 and P910,000 for 2021, 2022, and 2023 respectively.
Land P200,000, P240,000 and P300,000 for 2021, 2022, and 2023
respectively. Determine the correct amount of consolidated net income for
2023.
**PLEASE CHECK CORRECTION (The only entry on ABC's book was a debit to Land and a credit to Cash in
2022 for P82,000 and in 2023 a debit to cash for P102,000 and credit to Land for P82,000 and gain on sale of
land for P20,000.)

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