On January 1, 2018, Parent Company purchased 80% of the outstanding shares of Subsidiary Company for P800,000. On the date of acquisition,Subsidiary Company reported Ordinary Shares of P800,000 and Retained Earnings of P200,000. Subsidiary's Inventory was understated by P20,000;Equipment with a 5-year life was understated by P20,000, Building with an 8-year life was understated by P80,000 and land was understated byP40,000. The non-controlling interest is to be stated at fair value and the fair value of the non-controlling interest on January 1, 2018 is P210,000.The following are taken from the books of Parent and Subsidiary for 2018.ParentSubsidiarySales2,000,0001,500,000Gross Profit350,000550,000200,000Net Income150,000Dividend Declared (to be paid on Jan 15, 2019)100,00050,000Total Assets5,000,0004,000,000From the data above, determine: Assuming the retained earnings of Subsidiary on December 31, 2021 is P350,000, determine the non-controllinginterest to be reported in the consolidated financial statements on December 31, 2021 assuming no changes to Subsidiary company's ordinaryshares.

NCI stands Non- Controlling interest which is defined as the situation which happen when the firm…

On January 1, 2018, Parent Company purchased 80% of the outstanding shares of Subsidiary Company for P800,000. On the date Subsidiary Company reported Ordinary Shares of P800,000 and Retained Earnings of P200,000. Subsidiary's Inventory was understate Equipment with a 5- year life was understated by P20,000, Building with an 8-year life was understated by P80,000 and land was u P40,000. The non-controlling interest is to be stated at fair value and the fair value of the non-controlling interest on January 1, 2018 The following are taken from the books of Parent and Subsidiary for 2018. Subsidiary 1,500,000 350,000 Parent Sales 2,000,000 Gross Profit 550,000 Net Income 200,000 150,000 Dividend Declared (to be paid on Jan 15, 2019) Total Assets 100,000 5,000,000 50,000 4,000,000

On January 1, 2018, Parent Company purchased 80% of the outstanding shares of Subsidiary Company for P800,000. On the date Subsidiary Company reported Ordinary Shares of P800,000 and Retained Earnings of P200,000. Subsidiary's Inventory was understate Equipment with a 5- year life was understated by P20,000, Building with an 8-year life was understated by P80,000 and land was u P40,000. The non-controlling interest is to be stated at fair value and the fair value of the non-controlling interest on January 1, 2018 The following are taken from the books of Parent and Subsidiary for 2018. Subsidiary 1,500,000 350,000 Parent Sales 2,000,000 Gross Profit 550,000 Net Income 200,000 150,000 Dividend Declared (to be paid on Jan 15, 2019) Total Assets 100,000 5,000,000 50,000 4,000,000

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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