On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits. For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value. On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date. For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company.
On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits. For 20x2, Sedrosky Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Sedrosky Company are at fair market value. On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date. For the year 20x2, Pfieter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Sedrosky Company.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Commute for the consolidated net income.
Transcribed Image Text:On January 1, 20x2, Pfieter Company purchased 80 percent of the outstanding
shares of Sedrosky Company at a cost of P1,080,000. On that date, Sedrosky
Company had P600,000 worth of ordinary shares and P750,000 worth of
accumulated profits.
For 20x2, Sedrosky Company reported income of P270,000 and paid dividends
of P90,000. All of the assets and liabilities of Sedrosky Company are at fair
market value.
On December 31, 20x2, Pfieter Company sold equipment to Sedrosky Company
for P112,500 that had a cost of P67,500. The equipment is expected to have a
useful life of 10 years from this date.
For the year 20x2, Pfieter Company reported income from its own operations in
the amount of P300,000, which included the gain of P45,000 on equipment sold
to Sedrosky Company.
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