PROBLEM 4-11P Company acquired 4,000 shares of the outstanding stock of S Company for P1,200,000 onJanuary 1, 2020. P Company also paid P100,000 direct costs related to the combination. Onthis date, the stockholders' equity of S Company consisted of: Ordinary Shares (P100 par),P500,000; and Retained Earnings, P600,000. The carrying values of S Company identifiableassets and liabilities are equal to their fair market values.At the beginning of the year, P Company sold equipment costing P100,000 with accumulateddepreciation of P50,000 to S Company for Pl120,000. P Company was depreciating theequipment for 10 years with no salvage value using straight-line method and S Companycontinued the same method. At the end of the year, P Company reported net income ofP300,000 and paid dividends of P250,000 while S Company reported net income of P200,000and paid dividends of P10 per share. The parent company measures its non-controlling interestusing the proportionate method.Required:1. The consolidated net income on December 31, 2020 is:2. The balance of Non-controlling interest (NCI) at December 31, 2020 is:

In the case of consolidation first of all we will calculate the % of holding. in the same question %…

PROBLEM 4-11 P Company acquired 4,000 shares of the outstanding stock of S Company for P1,200,000 on January 1, 2020. P Company also paid P100,000 direct costs related to the combination. On this date, the stockholders' equity of S Company consisted of: Ordinary Shares (P100 par), P500,000; and Retained Eamings, P600,000. The carrying values of S Company identifiable assets and liabilities are equal to their fair market values. At the beginning of the year, P Company sold equipment costing P100,000 with accumulated depreciation of P50,000 to S Company for P120,000. P Company was depreciating the equipment for 10 years with no salvage value using straight-line method and S Company continued the same method. At the end of the year, P Company reported net income of P300,000 and paid dividends of P250,000 while S Company reported net income of P200,000 and paid dividends of P10 per share. The parent company measures its non-controlling interest using the proportionate method. Required: 1. The consolidated net income on December 31, 2020 is: 2. The balance of Non-controlling interest (NCI) at December 31, 2020 is:

PROBLEM 4-11 P Company acquired 4,000 shares of the outstanding stock of S Company for P1,200,000 on January 1, 2020. P Company also paid P100,000 direct costs related to the combination. On this date, the stockholders' equity of S Company consisted of: Ordinary Shares (P100 par), P500,000; and Retained Eamings, P600,000. The carrying values of S Company identifiable assets and liabilities are equal to their fair market values. At the beginning of the year, P Company sold equipment costing P100,000 with accumulated depreciation of P50,000 to S Company for P120,000. P Company was depreciating the equipment for 10 years with no salvage value using straight-line method and S Company continued the same method. At the end of the year, P Company reported net income of P300,000 and paid dividends of P250,000 while S Company reported net income of P200,000 and paid dividends of P10 per share. The parent company measures its non-controlling interest using the proportionate method. Required: 1. The consolidated net income on December 31, 2020 is: 2. The balance of Non-controlling interest (NCI) at December 31, 2020 is:

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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PROBLEM 4-11
P Company acquired 4,000 shares of the outstanding stock of S Company for P1,200,000 on
January 1, 2020. P Company also paid P100,000 direct costs related to the combination. On
this date, the stockholders' equity of S Company consisted of: Ordinary Shares (P100 par),
P500,000; and Retained Earnings, P600,000. The carrying values of S Company identifiable
assets and liabilities are equal to their fair market values.
At the beginning of the year, P Company sold equipment costing P100,000 with accumulated
depreciation of P50,000 to S Company for Pl120,000. P Company was depreciating the
equipment for 10 years with no salvage value using straight-line method and S Company
continued the same method. At the end of the year, P Company reported net income of
P300,000 and paid dividends of P250,000 while S Company reported net income of P200,000
and paid dividends of P10 per share. The parent company measures its non-controlling interest
using the proportionate method.
Required:
1. The consolidated net income on December 31, 2020 is:
2. The balance of Non-controlling interest (NCI) at December 31, 2020 is:

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