Pepper Company acquired 80% of the voting stock of Salt Company on January 1, 20x1, when Salt Company's retained earnings amounted to 130,000. The difference between the implied and book value and fair values of the non-cash assets on the date of acquisition was allocated as follows: Land. Equipment (10-year life) . Goodwill. „P 50, 000 .20, 000 .40, 000 Salt Company reported retained eamings of P260, 000 on January 1, 20x4, and 320,000 on December 31, 20x4. Salt Company reported net income of P90,000 and declared dividends of P30,000 in 20x4. Also, Pepper reported operating income in 20x4 in the amount of P700,000 with dividends paid of P25,000 and retained earnings on December 31, 20x4, of P3,500,000. The sales, cost of sales and intercompany sales made during 20x4 are as follows: Pepper Co. P 2,500,000 1,250,000 Salt Co. 1,200,000 Sales. Cost of Sales.. 875,000 Intercompany sales: Pepper to Salt. Salt to Pepper. 320, 000 290, 000 There were no intercompany sales prior to 20x3 and unrealized profits on January 1 and on December 31, 20x4, resulting from intercompany sales are summarized below: Unrealized Intercompany Profit on Resulting from: 1/1/x4 Sales by Salt Company to Pepper Company Sales by Pepper Company to Salt Company P 10,000 15,000 12/31/x4 P 5,000 20,000
Pepper Company acquired 80% of the voting stock of Salt Company on January 1, 20x1, when Salt Company's retained earnings amounted to 130,000. The difference between the implied and book value and fair values of the non-cash assets on the date of acquisition was allocated as follows: Land. Equipment (10-year life) . Goodwill. „P 50, 000 .20, 000 .40, 000 Salt Company reported retained eamings of P260, 000 on January 1, 20x4, and 320,000 on December 31, 20x4. Salt Company reported net income of P90,000 and declared dividends of P30,000 in 20x4. Also, Pepper reported operating income in 20x4 in the amount of P700,000 with dividends paid of P25,000 and retained earnings on December 31, 20x4, of P3,500,000. The sales, cost of sales and intercompany sales made during 20x4 are as follows: Pepper Co. P 2,500,000 1,250,000 Salt Co. 1,200,000 Sales. Cost of Sales.. 875,000 Intercompany sales: Pepper to Salt. Salt to Pepper. 320, 000 290, 000 There were no intercompany sales prior to 20x3 and unrealized profits on January 1 and on December 31, 20x4, resulting from intercompany sales are summarized below: Unrealized Intercompany Profit on Resulting from: 1/1/x4 Sales by Salt Company to Pepper Company Sales by Pepper Company to Salt Company P 10,000 15,000 12/31/x4 P 5,000 20,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Determine the Non-controlling interest in net income for 20x4.
Transcribed Image Text:Pepper Company acquired 80% of the voting stock of Salt Company on January 1, 20x1, when Salt Company's retained
earnings amounted to 130,000. The difference between the implied and book value and fair values of the non-cash assets on
the date of acquisition was allocated as follows:
Land.
P 50, 000
Equipment (10-year life) .
20, 000
Goodwill..
.40, 000
Salt Company reported retained eamings of P260, 000 on January 1, 20x4, and 320,000 on December 31, 20x4.
Salt Company reported net income of P90,000 and declared dividends of P30,000 in 20x4. Also, Pepper reported operating
income in 20x4 in the amount of P700,000 with dividends paid of P25,000 and retained earnings on December 31, 20x4, of
P3,500,000.
The sales, cost of sales and intercompany sales made during 20x4 are as follows:
Pepper Co.
P 2,500,000
1,250,000
Salt Co.
Sales.
1,200,000
875,000
Cost of Sales.
Intercompany sales:
Pepper to Salt.
Salt to Pepper.
320, 000
290, 000
There were no intercompany sales prior to 20x3 and unrealized profits on January 1 and on December 31, 20x4, resulting
from intercompany sales are summarized below:
Unrealized Intercompany
Profit on
Resulting from:
1/1/x4
12/31/x4
P 10,000
Sales by Salt Company to Pepper Company
Sales by Pepper Company to Salt Company
P 5,000
15,000
20,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education