Homework Help is Here – Start Your Trial Now!
Business
Finance
FIFTH PROBLEM On January 2, 2012, Power Company acquired 90% of the outstanding shares of Solar Inc. at book va During 2012 and 2013, intercompany sales amounted to P2,000,000 and P4,000,000, respectiv Power Company consistently recognized a 25% mark-up based on cost while Solar Inc. had a 25% g profit on sales. The inventories of the buying affiliate, which all came from inter-company transact show: Power Solar December 31, 2012 P240,000 100,000 December 31, 2013 P160,000 40,000

FIFTH PROBLEM On January 2, 2012, Power Company acquired 90% of the outstanding shares of Solar Inc. at book va During 2012 and 2013, intercompany sales amounted to P2,000,000 and P4,000,000, respectiv Power Company consistently recognized a 25% mark-up based on cost while Solar Inc. had a 25% g profit on sales. The inventories of the buying affiliate, which all came from inter-company transact show: Power Solar December 31, 2012 P240,000 100,000 December 31, 2013 P160,000 40,000

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
See similar textbooks
icon
Related questions
Question

1. Compute for the consolidated gross profit. 
2. Compute for the consolidated net income attributable to Parent.

FIFTH PROBLEM On January 2, 2012, Power Company acquired 90% of the outstanding shares of Solar Inc. at book value. During 2012 and 2013, intercompany sales amounted to P2,000,000 and P4,000,000, respectively. Power Company consistently recognized a 25% mark-up based on cost while Solar Inc. had a 25% gross profit on sales. The inventories of the buying affiliate, which all came from inter-company transactions show. December 31, 2012 December 31, 2013 Power P240,000 P160,000 Solar 100,000 40,000 On October 1. 2012, Solar Inc., purchased a piece of land costing P1,000,000 from Power Company for P1,500,000. On December 1, 2013, Solar Inc., sold this land to unrelated party for P1,500,000. On the other hand, on July 1, 2013, Solar Inc., sold a used photo-copier with a carrying value of P60,000 and remaining life of 3 years to Power Company for P42,000. Separate Statement of Comprehensiv income for the two compenies for the year 2013 foliow: Power Company Solar Inc. Sales P25,000,000 P14,000,000 Cost of Sales (8,400,000) P 5,600,000 (15,000,000) Gross Profit P10,000,000 Operating Expenses Operating Profit Loss on Sale of Office Equipment 16,000,000) 13,800,000) P1,800,000 ( 18,000) P 4,000,000 Dividend Revenue 40,000 Net Income P4,C00,0000 P 1,822,000
Transcribed Image Text:FIFTH PROBLEM On January 2, 2012, Power Company acquired 90% of the outstanding shares of Solar Inc. at book value. During 2012 and 2013, intercompany sales amounted to P2,000,000 and P4,000,000, respectively. Power Company consistently recognized a 25% mark-up based on cost while Solar Inc. had a 25% gross profit on sales. The inventories of the buying affiliate, which all came from inter-company transactions show. December 31, 2012 December 31, 2013 Power P240,000 P160,000 Solar 100,000 40,000 On October 1. 2012, Solar Inc., purchased a piece of land costing P1,000,000 from Power Company for P1,500,000. On December 1, 2013, Solar Inc., sold this land to unrelated party for P1,500,000. On the other hand, on July 1, 2013, Solar Inc., sold a used photo-copier with a carrying value of P60,000 and remaining life of 3 years to Power Company for P42,000. Separate Statement of Comprehensiv income for the two compenies for the year 2013 foliow: Power Company Solar Inc. Sales P25,000,000 P14,000,000 Cost of Sales (8,400,000) P 5,600,000 (15,000,000) Gross Profit P10,000,000 Operating Expenses Operating Profit Loss on Sale of Office Equipment 16,000,000) 13,800,000) P1,800,000 ( 18,000) P 4,000,000 Dividend Revenue 40,000 Net Income P4,C00,0000 P 1,822,000
Expert Solution
steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS