P Company acquired an 80% interest in S Company on January 1, 2011, for an amount equal to book value. S Company sold land to P Company in 2011 at a profit of P5,000. The land is held by the buying affiliate firm until 2013, when it is sold to an unaffiliated party for a profit of P6,000. S Company reported net income for 2011, 2012, and 2013 of P30,000, P40,000 and P50,000, respectively. 1. The parent’s investment income for 2011 would be: 2. The 2013 consolidated income statement would reflect a gain on sale of land in the amount of 3. The WPEE on December 31, 2013, concerning the intercompany sale of land would include:
P Company acquired an 80% interest in S Company on January 1, 2011, for an amount equal to book value. S Company sold land to P Company in 2011 at a profit of P5,000. The land is held by the buying affiliate firm until 2013, when it is sold to an unaffiliated party for a profit of P6,000. S Company reported net income for 2011, 2012, and 2013 of P30,000, P40,000 and P50,000, respectively. 1. The parent’s investment income for 2011 would be: 2. The 2013 consolidated income statement would reflect a gain on sale of land in the amount of 3. The WPEE on December 31, 2013, concerning the intercompany sale of land would include:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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P Company acquired an 80% interest in S Company on January 1, 2011, for an amount equal to book value. S Company sold land to P Company in 2011 at a profit of P5,000. The land is held by the buying affiliate firm until 2013, when it is sold to an unaffiliated party for a profit of P6,000. S Company reported net income for 2011, 2012, and 2013 of P30,000, P40,000 and P50,000, respectively.
1. The parent’s investment income for 2011 would be:
2. The 2013 consolidated income statement would reflect a gain on sale of land in the amount of
3. The WPEE on December 31, 2013, concerning the intercompany sale of land would include:
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