On January 1, 2020, Pet Company purchased 80% of the shares of Sam value. The shareholders' equity of Sam Company on that date showed: Ordinary Shares- P570,000 and Retained eamings- P490,000. On April 30, 2020, Pet acquired used machinery for P84,000 from Sam that was being carried in the latter's books at P105,000. The asset still has a remaining useful life of 5 years. On the other hand, on August 31, 2020, Sam purchased an equipment that was already 20% depreciated from Pet for P345,000. The original cost of this equipment was P375,000 and had a remaining life of 8 years. Net income of Pet Company and Sam Company for 2020 amounted to P360,000 and P155,000. Dividends paid totaled to P115,000 and P52,500 for Pet and Sam, respectively.

On January 1, 2020, Pet Company purchased 80% of the shares of Sam value. The shareholders' equity of Sam Company on that date showed: Ordinary Shares- P570,000 and Retained eamings- P490,000. On April 30, 2020, Pet acquired used machinery for P84,000 from Sam that was being carried in the latter's books at P105,000. The asset still has a remaining useful life of 5 years. On the other hand, on August 31, 2020, Sam purchased an equipment that was already 20% depreciated from Pet for P345,000. The original cost of this equipment was P375,000 and had a remaining life of 8 years. Net income of Pet Company and Sam Company for 2020 amounted to P360,000 and P155,000. Dividends paid totaled to P115,000 and P52,500 for Pet and Sam, respectively.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

2.
3. Non-controlling interest in net asset of subsidiary (NCINAS)
4. The carrying value of Property and Equipment.

On January 1, 2020, Pet Company purchased 80% of the shares of Sam Company at book
value. The shareholders' equity of Sam Company on that date showed: Ordinary Shares-
P570,000 and Retained eamings- P490,000. On April 30, 2020, Pet acquired used machinery
for P84,000 from Sam that was being carried in the latter's books at P105,000. The asset still
has a remaining useful life of 5 years. On the other hand, on August 31, 2020, Sam purchased
an equipment that was already 20% depreciated from Pet for P345,000. The original cost of
this equipment was P375,000 and had a remaining life of 8 years. Net income of Pet Company
and Sam Company for 2020 amounted to P360,000 and P155,000. Dividends paid totaled to
P115,000 and P52,500 for Pet and Sam, respectively.

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