Pentagon Company acquires 80% of Square Company for P500,000 on January 1, 2012. On that date, Square's common stock and retained earnings amounted to P200,000. Inventory was overvalued by P10,000, equipment (10-year remaining life) was undervalued by P30,000 and buildings (10-year remaining life) were undervalued by P40,000. Any excess consideration is attributable to goodwill. From 2012 to 2014, Square earns income and pay dividends as follows: 2012 2013 2014 Net income P100,000 P120,000 P130,000 Dividends 40,000 50,000 60,000 What amount is the non-controlling interest in net income of Square for the year ended December 31, 2012? A. P12,600 B. P20,000 C. P16,600

Pentagon Company acquires 80% of Square Company for P500,000 on January 1, 2012. On that date, Square's common stock and retained earnings amounted to P200,000. Inventory was overvalued by P10,000, equipment (10-year remaining life) was undervalued by P30,000 and buildings (10-year remaining life) were undervalued by P40,000. Any excess consideration is attributable to goodwill. From 2012 to 2014, Square earns income and pay dividends as follows: 2012 2013 2014 Net income P100,000 P120,000 P130,000 Dividends 40,000 50,000 60,000 What amount is the non-controlling interest in net income of Square for the year ended December 31, 2012? A. P12,600 B. P20,000 C. P16,600

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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Sue Inc. acquires 80% of lan Co. for $500,000 on January 2, 2024. lan reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. lan Co. earns income and pays dividends as follows: 2024 2025 Net income $ 100,000 $120,000 $130,000 Dividends 40,000 50,000 60,000 Assume the equity method is applied. Compute the non-controlling interest in lan at December 31, 2024. O $135,600. $137,000. O $112,000. $100,000. 2026 O $118,600.
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