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 3On January 1, 20x9, Maykaya Corporation acquired 80 percent of Galisod Company's common stock for P160,000 cash. The fair value of the non-controlling interest at that date was determined to be P40,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:At the date of the business combination, the book values of Galisod’s net assets and liabilities approximated fair value except for inventory, which had a fair value of P45,000, and land, which had a fair value of P60,000 (using the full-goodwill approach). 1. What amount of total liabilities will be reported in the consolidated balance sheet prepared immediately after the business combination?a. P395,000b. P280,000c. P275,000d. P195,000 2. What amount will be reported as non-controlling interest in the consolidated balance sheet prepared immediately after the business combination?a. P0b. P15,000c. P40,000d. P46,000 3. What amount of consolidated retained earnings…