Sure Corporation, a 75% own subsidiary of Pretty Corporation sells inventory to its parent at 125% above cost, while Pretty Corporation sells merchandise to its subsidiary at 120% of cost. Inventories of the two companies for 2020 are as follows: Beginning inventory Ending inventory Pretty Corp. P400,000 500,000 Sure Corp. P250,000 200,000 Pretty Corporation's beginning and ending inventories include merchandise acquired from Sure Corporation of P150,000 and P200,000, respectively. Sure Corporation also reported beginning and ending inventories from Pretty Corporation of P80,000 and P60,000, respectively. Required: 1. If Sure Corporation reported a net income for 2020 of P300,000, the non-controlling interest on subsidiary net income is: 2. In the consolidated balance sheet, inventories should be reported at:

Sure Corporation, a 75% own subsidiary of Pretty Corporation sells inventory to its parent at 125% above cost, while Pretty Corporation sells merchandise to its subsidiary at 120% of cost. Inventories of the two companies for 2020 are as follows: Beginning inventory Ending inventory Pretty Corp. P400,000 500,000 Sure Corp. P250,000 200,000 Pretty Corporation's beginning and ending inventories include merchandise acquired from Sure Corporation of P150,000 and P200,000, respectively. Sure Corporation also reported beginning and ending inventories from Pretty Corporation of P80,000 and P60,000, respectively. Required: 1. If Sure Corporation reported a net income for 2020 of P300,000, the non-controlling interest on subsidiary net income is: 2. In the consolidated balance sheet, inventories should be reported at:

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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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Sure Corporation, a 75% own subsidiary of Pretty Corporation sells inventory to its parent at
125% above cost, while Pretty Corporation sells merchandise to its subsidiary at 120% of
cost. Inventories of the two companies for 2020 are as follows:
Beginning inventory
Ending inventory
Pretty Corp.
P400,000
500,000
Sure Corp.
P250,000
200,000
Pretty Corporation's beginning and ending inventories include merchandise acquired from
Sure Corporation of P150,000 and P200,000, respectively. Sure Corporation also reported
beginning and ending inventories from Pretty Corporation of P80,000 and P60,000,
respectively.
Required:
1. If Sure Corporation reported a net income for 2020 of P300,000, the non-controlling
interest on subsidiary net income is:
2. In the consolidated balance sheet, inventories should be reported at:

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