On January 1, 20x0, P Company purchased 80 percent of the outstanding shares of S Company by paying P650,000. On that date, S Company P300,000 capital stock and P500,000 retained earnings. An undervalued asset attributable to building amounting to P75,000 with a remaining life of 25 years. All other assets and liabilities of S Company had book value approximated their fair market value. On January 1, 20x1 P’s common stock and retained earnings amounted to P1,000,000 and P800,000, respectively, while S Company’s retained earnings is P600,000. The 20x1 net income and dividends using cost (or initial value) method that was as follows;                                   Net Income                          Dividends                         P Company                 P340,000                                P100,000                          S Company                 P150,000                                 P50,000 On April 1, 20x1, S Company sold equipment with book value of P30,000 to P Company for 60,000. The gain on the sale is included in the net income of S Company indicated above. The equipment is expected to have to have a remaining useful life of five years from the date of sale. On September 30, 20x1, P Company sold machinery with a book value of P40,000 to S Company for P75,000. The gain on the sale is also included in the net income of P company indicated above. The machinery is expected to last for ten (10) years from the date of sale. What is the non-controlling interest in net assets on December 31, 20x2, assuming that the net income and dividends of subsidiary amounted to P200,000 and P70,000, respectively? A. 208,000        C. 235,300 B. 209,200        D. 222,400

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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On January 1, 20x0, P Company purchased 80 percent of the outstanding shares of S Company by paying P650,000. On that date, S Company P300,000 capital stock and P500,000 retained earnings. An undervalued asset attributable to building amounting to P75,000 with a remaining life of 25 years. All other assets and liabilities of S Company had book value approximated their fair market value.

On January 1, 20x1 P’s common stock and retained earnings amounted to P1,000,000 and P800,000, respectively, while S Company’s retained earnings is P600,000.

The 20x1 net income and dividends using cost (or initial value) method that was as follows;

                                  Net Income                          Dividends                        

P Company                 P340,000                                P100,000                         

S Company                 P150,000                                 P50,000

On April 1, 20x1, S Company sold equipment with book value of P30,000 to P Company for 60,000. The gain on the sale is included in the net income of S Company indicated above. The equipment is expected to have to have a remaining useful life of five years from the date of sale.

On September 30, 20x1, P Company sold machinery with a book value of P40,000 to S Company for P75,000. The gain on the sale is also included in the net income of P company indicated above. The machinery is expected to last for ten (10) years from the date of sale.

What is the non-controlling interest in net assets on December 31, 20x2, assuming that the net income and dividends of subsidiary amounted to P200,000 and P70,000, respectively?
A. 208,000        C. 235,300
B. 209,200        D. 222,400

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