Intor Company acquired 20% of the ordinary shares of Intee Company onJanuary 1, 2019. At this date, all the identifiable assets and liabilities of Inteewere recorded at fair value. An analysis of the acquisition showed thatP200,000 of goodwill was acquired. Intee Company recorded a profit ofP1,000,000 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. Thisinventory had previously cost Intee P1,000,000 and remains unsold by Intoron December 31, 2020.• In November 2020, Intor sold inventory to Intee at a before tax profit ofP300,000. Half of this was sold by Intee before December 31, 2020.• In December 2019, Intee sold inventory to Intor for P1,800,000. Thisinventory had cost Intee P1,200,000. At December 31, 2019, this inventoryremained 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" in2020 at

Mergers and acquisitions are strategic business actions that include the consolidation or merging of…

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.

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.

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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