Peter acquired 80% of the outstanding ordinary shares of Simon on January 2, 20x1. During 20x1, Peter sold inventory to Simon for P125,000 with 25% gross profit based on cost, 20% of this inventory remained unsold at the end of the year. On the other hand Simon sold inventory to Peter for P50,000 with 40% gross profit rate base on sales, 90% of this inventory were sold to outsiders. The remaining inventories of Peter and Simon were sold in year 20x2. On January 5, 20x2, Peter sold inventory to Simon for P150,000 with gross profit rate of 20% based on sales. 70% of this inventories were sold to outsiders while the remaining were sold in 20x3. On the other hand, Simon sold inventory to Peter for P30,000 with gross profit based on cost of 20%, ¾ of this remained unsold at the end of the year. On December 31, 20x2, Peter and Simon reported the following: Peter Simon Sales 800,000 500,000 Cost of Sales (350,000) (200,000) Gross Profit 450,000 300,000 Operating expenses (50,000) (20,000) Net Income 400,000 280,000 Dividend Income from Simon 75,000 Total Net Income 475,000 280,000 1. What is the amount of consolidated net income for 20x2? 2. What is the amount of non-controlling interest in net income for 20x2?
Peter acquired 80% of the outstanding ordinary shares of Simon on January 2, 20x1. During 20x1, Peter sold inventory to Simon for P125,000 with 25% gross profit based on cost, 20% of this inventory remained unsold at the end of the year. On the other hand Simon sold inventory to Peter for P50,000 with 40% gross profit rate base on sales, 90% of this inventory were sold to outsiders. The remaining inventories of Peter and Simon were sold in year 20x2. On January 5, 20x2, Peter sold inventory to Simon for P150,000 with gross profit rate of 20% based on sales. 70% of this inventories were sold to outsiders while the remaining were sold in 20x3. On the other hand, Simon sold inventory to Peter for P30,000 with gross profit based on cost of 20%, ¾ of this remained unsold at the end of the year. On December 31, 20x2, Peter and Simon reported the following: Peter Simon Sales 800,000 500,000 Cost of Sales (350,000) (200,000) Gross Profit 450,000 300,000 Operating expenses (50,000) (20,000) Net Income 400,000 280,000 Dividend Income from Simon 75,000 Total Net Income 475,000 280,000 1. What is the amount of consolidated net income for 20x2? 2. What is the amount of non-controlling interest in net income for 20x2?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Peter acquired 80% of the outstanding ordinary shares of Simon on January 2, 20x1.
During 20x1, Peter sold inventory to Simon for P125,000 with 25% gross profit based on cost, 20% of this inventory remained unsold at the end of the year. On the other hand Simon sold inventory to Peter for P50,000 with 40% gross profit rate base on sales, 90% of this inventory were sold to outsiders. The remaining inventories of Peter and Simon were sold in year 20x2.
On January 5, 20x2, Peter sold inventory to Simon for P150,000 with gross profit rate of 20% based on sales. 70% of this inventories were sold to outsiders while the remaining were sold in 20x3. On the other hand, Simon sold inventory to Peter for P30,000 with gross profit based on cost of 20%, ¾ of this remained unsold at the end of the year.
On December 31, 20x2, Peter and Simon reported the following:
Peter Simon
Sales 800,000 500,000
Cost of Sales (350,000) (200,000)
Gross Profit 450,000 300,000
Operating expenses (50,000) (20,000)
Net Income 400,000 280,000
Dividend Income from Simon 75,000
Total Net Income 475,000 280,000
1. What is the amount of consolidated net income for 20x2?
2. What is the amount of non-controlling interest in net income for 20x2?
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 4 steps
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