The Jonnie Company owns 75% of the Junior Company. On December 31, 2020, the last day of the accounting period, Junior sold to Jonnie a non-current asset for P200,000. The asset originally cost P500,000 and at the end of the reporting period its carrying amount in Junior’s books was P160,000. The group’s consolidated statement of financial position has been drafted without any adjustments in relation to this non-current asset. What adjustments should be made to the consolidated statement of financial position figures for retained earnings and non-controlling interest? a. Retained earnings (Reduce by P30,000); Non-controlling interest (Reduce by P10,000) b. Retained earnings (Increase by P300,000); Non-controlling interest (No change) c. Retained earnings (Reduce by P40,000); Non-controlling interest (No change) d. Retained earnings (Increase by P225,000); Non-controlling interest (Increase by P75,000)
The Jonnie Company owns 75% of the Junior Company. On December 31, 2020, the last
day of the accounting period, Junior sold to Jonnie a non-current asset for P200,000. The
asset originally cost P500,000 and at the end of the reporting period its carrying amount in
Junior’s books was P160,000. The group’s consolidated statement of financial position has
been drafted without any adjustments in relation to this non-current asset. What
adjustments should be made to the consolidated statement of financial position figures for
a. Retained earnings (Reduce by P30,000); Non-controlling interest (Reduce by
P10,000)
b. Retained earnings (Increase by P300,000); Non-controlling interest (No change)
c. Retained earnings (Reduce by P40,000); Non-controlling interest (No change)
d. Retained earnings (Increase by P225,000); Non-controlling interest (Increase by
P75,000)
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