On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P15 per share. On this date,XYZ's equity comprised of P50,000 share capital and P24,000 retained earnings. NCI was measured at its proportionate share in XYZ'snet identifiable assets.XYZ's assets and liabilities on January 1, 2021 approximate their fair values except for the following:CarryingFairFair valueXYZ, Inc.values adjustments (FVA)атountsInventoryEquipment (4 yrs. remaininglife)Accumulated depreciationTotals23,00031,0008,00060,000(10,000) (12,000)79,00050,00010,000(2,000)16,00063,000XYZ, Inc. declared and paid dividends of P10,000 during 2021. There was no impairment in goodwill. The year-end individualstatements of profit or loss are shown below:Statements of profit or lossFor the year ended December 31, 2021АВС Со.XYZ, Inc.Sales300,000120,000Cost of goods soldGross profitDepreciation expense(165,000)135,000(40,000)(32,000)(3,000)8,00068,000(72,000)48,000(10,000)(18,000)Distribution costsInterest expenseDividend incomeProfit for the year20,000How much is the consolidated profit to be reported on December 31,2021?

Consolidated profit refers to the aggregated profit of parent and subsidiary company that is stated…

On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P15 per share. On this date, XYZ's equity comprised of P50,000 share capital and P24,000 retained earnings. NCI was measured at its proportionate share in XYZ's net identifiable assets. XYZ's assets and liabilities on January 1, 2021 approximate their fair values except for the following: Fair value Carrying amounts 23,000 Fair values adjustments (FVA) 31,000 XYZ, Inc. Inventory Equipment (4 yrs. remaining life) Accumulated depreciation Totals 8,000 50,000 60,000 10,000 (10,000) (12,000) 63,000 79,000 (2,000) 16,000 XYZ, Inc. declared and paid dividends of P10,000 during 2021. There was no impairment in goodwill. The year-end individual statements of profit or loss are shown below: Statements of profit or loss For the year ended December 31, 2021 ABC Co. XYZ, Inc. 120,000 |(72,000) 48,000 (10,000) (18,000) Sales 300,000 (165,000) 135,000 (40,000) (32,000) (3,000) 8,000 68,000 Cost of goods sold Gross profit Depreciation expense Distribution costs Interest expense Dividend income Profit for the year 20,000 How much is the consolidated profit to be reported on December 31,2021?

On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P15 per share. On this date, XYZ's equity comprised of P50,000 share capital and P24,000 retained earnings. NCI was measured at its proportionate share in XYZ's net identifiable assets. XYZ's assets and liabilities on January 1, 2021 approximate their fair values except for the following: Fair value Carrying amounts 23,000 Fair values adjustments (FVA) 31,000 XYZ, Inc. Inventory Equipment (4 yrs. remaining life) Accumulated depreciation Totals 8,000 50,000 60,000 10,000 (10,000) (12,000) 63,000 79,000 (2,000) 16,000 XYZ, Inc. declared and paid dividends of P10,000 during 2021. There was no impairment in goodwill. The year-end individual statements of profit or loss are shown below: Statements of profit or loss For the year ended December 31, 2021 ABC Co. XYZ, Inc. 120,000 |(72,000) 48,000 (10,000) (18,000) Sales 300,000 (165,000) 135,000 (40,000) (32,000) (3,000) 8,000 68,000 Cost of goods sold Gross profit Depreciation expense Distribution costs Interest expense Dividend income Profit for the year 20,000 How much is the consolidated profit to be reported on December 31,2021?

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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