P Corp. recorded P65,000 investment income from S Corp., its 80% owned subsidiary for 2020 and 70,000 for 2021. The inventory income represented 80% of S reported income of P81,250 for 2020 and 87,500 for 2021. P's net income (including investment income) for 2020 was P240,000 and for 2021 was P160,000. During 2020, S sold merchandise to P for P180,000. This merchandise costs P130,000 and 40% of it was not sold by P at the end of December 31, 2020. S sold merchandise that cost P150,000 to P for P210,000 during 2021. The December 31, 2021 ending inventory of P included P63,000 of this merchandise.

P Corp. recorded P65,000 investment income from S Corp., its 80% owned subsidiary for 2020 and 70,000 for 2021. The inventory income represented 80% of S reported income of P81,250 for 2020 and 87,500 for 2021. P's net income (including investment income) for 2020 was P240,000 and for 2021 was P160,000. During 2020, S sold merchandise to P for P180,000. This merchandise costs P130,000 and 40% of it was not sold by P at the end of December 31, 2020. S sold merchandise that cost P150,000 to P for P210,000 during 2021. The December 31, 2021 ending inventory of P included P63,000 of this merchandise.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

1. What is the Consolidated Net Income for 2020?

2. What is the Consolidated Net Income for 2021?

P Corp. recorded P65,000 investment income from S Corp., its 80% owned subsidiary for 2020 and
70,000 for 2021. The inventory income represented 80% of S reported income of P81,250 for 2020 and
87,500 for 2021. P's net income (including investment income) for 2020 was P240,000 and for 2021
was P160,000. During 2020, S sold merchandise to P for P180,000. This merchandise costs P130,000
and 40% of it was not sold by P at the end of December 31, 2020. S sold merchandise that cost
P150,000 to P for P210,000 during 2021. The December 31, 2021 ending inventory of P included
P63,000 of this merchandise.

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