Intor Company acquired 20% of the ordinary shares of Intee Company on January 1, 2019. At this date, all the identifiable assets and liabilities of Intee were recorded at fair value. An analysis of the acquisition showed that P200,000 of goodwill was acquired. Intee Company recorded a profit of P1,000,000 for 2020 and paid dividend of P700,000 during the same year. The following transactions have occurred between the two entities. • In December 2020, Intee sold inventory to Intor for P1,500,000. This inventory had previously cost Intee P1,000,000 and remains unsold by Intor on December 31, 2020. • In November 2020, Intor sold inventory to Intee at a before tax profit of P300,000. Half of this was sold by Intee before December 31, 2020. In December 2019, Intee sold inventory to Intor for P1,800,000. This inventory had cost Intee P1,200,000. At December 31, 2019, this inventory remained unsold by Intor. However, it was all sold by Intor in 2020. Ignoring income tax, Intor company shall report a "share of profit of associate" in 2020 at
Intor Company acquired 20% of the ordinary shares of Intee Company on January 1, 2019. At this date, all the identifiable assets and liabilities of Intee were recorded at fair value. An analysis of the acquisition showed that P200,000 of goodwill was acquired. Intee Company recorded a profit of P1,000,000 for 2020 and paid dividend of P700,000 during the same year. The following transactions have occurred between the two entities. • In December 2020, Intee sold inventory to Intor for P1,500,000. This inventory had previously cost Intee P1,000,000 and remains unsold by Intor on December 31, 2020. • In November 2020, Intor sold inventory to Intee at a before tax profit of P300,000. Half of this was sold by Intee before December 31, 2020. In December 2019, Intee sold inventory to Intor for P1,800,000. This inventory had cost Intee P1,200,000. At December 31, 2019, this inventory remained unsold by Intor. However, it was all sold by Intor in 2020. Ignoring income tax, Intor company shall report a "share of profit of associate" in 2020 at
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Intor Company acquired 20% of the ordinary shares of Intee Company on
January 1, 2019. At this date, all the identifiable assets and liabilities of
Intee were recorded at fair value. An analysis of the acquisition showed
that P200,000 of goodwill was acquired. Intee Company recorded a profit
of P1,000,000 for 2020 and paid dividend of P700,000 during the same
year.
The following transactions have occurred between the two entities.
• In December 2020, Intee sold inventory to Intor for P1,500,000. This
inventory had previously cost Intee P1,000,000 and remains unsold by
Intor on December 31. 2020.
• In November 2020, Intor sold inventory to Intee at a before tax profit
of P300.000. Half of this was sold by Intee before December 31,
2020.
• In December 2019, Intee sold inventory to Intor for P1,800,000. This
inventory had cost Intee P1,200,000. At December 31. 2019, this
inventory remained unsold by Intor. However, it was all sold by Intor
in 2020.
Ignoring income tax, Intor company shall report a "share of profit of associate” in 2020 at?
Transcribed Image Text:Intor Company acquired 20% of the ordinary shares of Intee Company on
January 1, 2019. At this date, all the identifiable assets and liabilities of
Intee were recorded at fair value. An analysis of the acquisition showed
that P200,000 of goodwill was acquired. Intee Company recorded a profit
of P1,000,000 for 2020 and paid dividend of P700,000 during the same
year.
The following transactions have occurred between the two entities.
• In December 2020, Intee sold inventory to Intor for P1,500,000. This
inventory had previously cost Intee P1,000,000 and remains unsold by
Intor on December 31, 2020.
In November 2020, Intor sold inventory to lIntee at a before tax profit
of P300,000. Half of this was sold by Intee before December 31,
2020.
• In December 2019, Intee sold inventory to Intor for P1,800,000. This
inventory had cost Intee P1,200,000. At December 31, 2019, this
inventory remained unsold by Intor. However, it was all sold by Intor
in 2020.
Ignoring income tax, Intor company shall report a "share of profit of
associate" in 2020 at
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