Pinky Company has 80% holdings over Silk Company. During 2018, Pinky Company sold merchandise to Silk Company for P120,000 and in turn, purchased P90,000 from Silk Company. Both sales were made on account. Intercompany sales of merchandise during 2018 were made at the following gross profit rates: Downstream intercompany sale Upstream intercompany sale 25% based on sales 20% based on cost As of December 31, 2018, 30% of all intercompany sales remain in ending inventory of the buying affiliate. The beginning inventory of Pinky includes P2,500 worth of merchandise acquired from Silk on which Silk reported a profit of P1,000 while the beginning inventory of Silk also includes P3,000 of merchandise acquired from Pinky at 35% mark- up. Using cost method, the following results of operations for 2018 are as follows: Pinky Company 198,000 60,000 Silk Company 75,000 10,000 Net income Dividends declared and paid 33. How much of the consolidated net income for 2018 is attributable to the controlling interest? A. 239,250 B. 240,140 C. 240,300 D. 240,440

Pinky Company has 80% holdings over Silk Company. During 2018, Pinky Company sold merchandise to Silk Company for P120,000 and in turn, purchased P90,000 from Silk Company. Both sales were made on account. Intercompany sales of merchandise during 2018 were made at the following gross profit rates: Downstream intercompany sale Upstream intercompany sale 25% based on sales 20% based on cost As of December 31, 2018, 30% of all intercompany sales remain in ending inventory of the buying affiliate. The beginning inventory of Pinky includes P2,500 worth of merchandise acquired from Silk on which Silk reported a profit of P1,000 while the beginning inventory of Silk also includes P3,000 of merchandise acquired from Pinky at 35% mark- up. Using cost method, the following results of operations for 2018 are as follows: Pinky Company 198,000 60,000 Silk Company 75,000 10,000 Net income Dividends declared and paid 33. How much of the consolidated net income for 2018 is attributable to the controlling interest? A. 239,250 B. 240,140 C. 240,300 D. 240,440

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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Question

Pinky Company has 80% holdings over Silk Company. During 2018, Pinky Company sold merchandise to Silk
Company for P120,000 and in turn, purchased P90,000 from Silk Company. Both sales were made on account.
Intercompany sales of merchandise during 2018 were made at the following gross profit rates:
Downstream intercompany sale
Upstream intercompany sale
25% based on sales
20% based on cost
As of December 31, 2018, 30% of all intercompany sales remain in ending inventory of the buying affiliate. The
beginning inventory of Pinky includes P2,500 worth of merchandise acquired from Silk on which Silk reported a profit
of P1,000 while the beginning inventory of Silk also includes P3,000 of merchandise acquired from Pinky at 35% mark-
up. Using cost method, the following results of operations for 2018 are as follows:
Pinky Company
198,000
60,000
Silk Company
75,000
10,000
Net income
Dividends declared and paid
33. How much of the consolidated net income for 2018 is attributable to the controlling interest?
A. 239,250
B. 240,140
C. 240,300
D. 240,440

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