PROBLEM III. On January 1, 2020, P Corporation purchase 80% of S Company's ordinary share for P810,000. P37,500 of the excess is attributable to goodwill and the balance to depreciable asset with economic life of ten years. NCI is measured at fair value on the date of acquisition. On this date, shareholders' equity of the two companies were as follows: P. Corporation S Company Ordinary share Retained earnings P1,312,500 1,950,000 P300,000 525,000 On December 31, 2020, S Company reported net income of P131,250 and paid dividends of P45,000 to Party. Party reported earnings from its own operations of 356,250 and paid dividends of P172,500. Goodwill has been impaired and should be m500 31200
PROBLEM III. On January 1, 2020, P Corporation purchase 80% of S Company's ordinary share for P810,000. P37,500 of the excess is attributable to goodwill and the balance to depreciable asset with economic life of ten years. NCI is measured at fair value on the date of acquisition. On this date, shareholders' equity of the two companies were as follows: P. Corporation S Company Ordinary share Retained earnings P1,312,500 1,950,000 P300,000 525,000 On December 31, 2020, S Company reported net income of P131,250 and paid dividends of P45,000 to Party. Party reported earnings from its own operations of 356,250 and paid dividends of P172,500. Goodwill has been impaired and should be m500 31200
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:PROBLEM III.
On January 1, 2020, P Corporation purchase 80% of S Company's ordinary share for P810,000. P37,500 of the excess is
attributable to goodwill and the balance to depreciable asset with economic life of ten years. NCI is measured at fair value
on the date of acquisition. On this date, shareholders' equity of the two companies were as follows:
P Corporation
S Company
Ordinary share
P1,312,500
P300,000
Retained earnings
1,950,000
525,000
On December 31, 2020, S Company reported net income of P131,250 and paid dividends of P45,000 to Party. Party reported
earnings from its own operations of 356,250 and paid dividends of P172,500. Goodwill has been impaired and should be
reported at P7,500 on December 31, 2020.
1. Net income attributable to parent
2. NCINIS
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