On January 4, 2022, Party Corporation purchase 80% of Summer Company’s ordinary share for P810,000 worth of its own shares of stocks currently selling at P60 per share. Fair value of Summer Co.’s assets and liabilities are equal to fair value except for undervalued depreciable asset for P140,00 with economic life of ten (10) years. Non-controlling interest is measured at fair value on date of acquisition. On the date of acquisition, shareholder’s equity of two companies are as follows: Party CorporationSummer CompanyOrdinary ShareP1,312,500P300,000Retained Earnings1,950,000525,000On December 31, 2022, Summer Company reported net income of P181,250 and paid dividends of P30,000 to the non-controlling interest. Party reported net earnings of P375,500 and paid dividends of P122,500. Goodwill had been impaired and should be reported at P22,500 on December 31, 2022.How much is the Non-Controlling Interest in Net Income of Subsidiary (NCINIS)?How much is the consolidated shareholders’ equity as of December 31, 2022?

Answered: How much is the Non-Controlling…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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On January 4, 2022, Party Corporation purchase 80% of Summer Company’s ordinary share for P810,000 worth of its own shares of stocks currently selling at P60 per share. Fair value of Summer Co.’s assets and liabilities are equal to fair value except for undervalued depreciable asset for P140,00 with economic life of ten (10) years. Non-controlling interest is measured at fair value on date of acquisition. On the date of acquisition, shareholder’s equity of two companies are as follows:

	Party Corporation	Summer Company
Ordinary Share	P1,312,500	P300,000
Retained Earnings	1,950,000	525,000

On December 31, 2022, Summer Company reported net income of P181,250 and paid dividends of P30,000 to the non-controlling interest. Party reported net earnings of P375,500 and paid dividends of P122,500. Goodwill had been impaired and should be reported at P22,500 on December 31, 2022.

How much is the Non-Controlling Interest in Net Income of Subsidiary (NCINIS)?

How much is the consolidated shareholders’ equity as of December 31, 2022?

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