On January 1, 2018, P Company purchased 6,000 shares of the 7,500 outstanding shares of S Company by payingP700,000. On that date, S Company had P300,000 capital stock and P500,000 of retained earnings. The excess costover book value was attributable to the building with a remaining life of 25 years. All other assets and liabilities of SCompany had book value approximated their fair market value. The fair value of NCI on this date was P175,000. PCompany's retained earnings as of January 1, 2018 was P550,000. The 2018 and 2019 net income and dividendswere as follows:Net incomeDividends2018P340,000150,0002019P440,000250,00020182019P CompanyS CompanyP100,00050,000P150,000100,000On April 1, 2018, S Company sold equipment with a book value of P30,000 to P Company for P60,000. The equipmentis expected to have a remaining useful life of five years from the date of sale.On August 31, 2018, P Company sold machinery with a book value of P40,000 to S Company for P85,000. Themachinery is expected to last for ten years from date of sale.38. Compute for the consolidated net income for 2018 and 2019.2019566,900617,5002018353,700378,0002018382,5002019617,500566,900A.C.В.357,900D.39. Compute for the consolidated retained earnings as of December 31, 2018 and 2019.20192018828,000 1,295,500803,700201920181,318,000 1,765,5001,303,700А.C.В.1,220,600D.1,720,600

Consolidation - On the same date, financial statements are prepared for both the main firm and its…

On January 1, 2018, P Company purchased 6,000 shares of the 7,500 outstanding shares of S Company by paying P700,000. On that date, S Company had P300,000 capital stock and P500,000 of retained earnings. The excess cost over book value was attributable to the building with a remaining life of 25 years. All other assets and liabilities of S Company had book value approximated their fair market value. The fair value of NCI on this date was P175,000. P Company's retained earnings as of January 1, 2018 was P550,000. The 2018 and 2019 net income and dividends were as follows: P Company S Company 2018 P340,000 150,000 Net income 2019 P440,000 250,000 2018 P100,000 50,000 Dividends 2019 P150,000 100,000 On April 1, 2018, S Company sold equipment with a book value of P30,000 to P Company for P60,000. The equipment is expected to have a remaining useful life of five years from the date of sale. On August 31, 2018, P Company sold machinery with a book value of P40,000 to S Company for P85,000. The machinery is expected to last for ten years from date of sale. 38. Compute for the consolidated net income for 2018 and 2019.

On January 1, 2018, P Company purchased 6,000 shares of the 7,500 outstanding shares of S Company by paying P700,000. On that date, S Company had P300,000 capital stock and P500,000 of retained earnings. The excess cost over book value was attributable to the building with a remaining life of 25 years. All other assets and liabilities of S Company had book value approximated their fair market value. The fair value of NCI on this date was P175,000. P Company's retained earnings as of January 1, 2018 was P550,000. The 2018 and 2019 net income and dividends were as follows: P Company S Company 2018 P340,000 150,000 Net income 2019 P440,000 250,000 2018 P100,000 50,000 Dividends 2019 P150,000 100,000 On April 1, 2018, S Company sold equipment with a book value of P30,000 to P Company for P60,000. The equipment is expected to have a remaining useful life of five years from the date of sale. On August 31, 2018, P Company sold machinery with a book value of P40,000 to S Company for P85,000. The machinery is expected to last for ten years from date of sale. 38. Compute for the consolidated net income for 2018 and 2019.

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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