The Non-controlling interest in Net Income for 20x1: A. 30,000B. 25,500 C. 24,900 D. 24,300 PROBLEM 1On January 1, 20x0, P Company purchased 80 percent of the outstanding shares of S Company by payingP650,000.On that date, S Company P300,000 capital stock and P500,000 retained earnings. Anundervalued asset attributable to building amounting to P75,000 with a remaining life of 25 years. Allother assets and liabilities of S Company had book value approximated their fair market value.On January 1, 20x1 P's common stock and retained earnings amounted to P1,000,000 and P800,000,respectively,while S Company's retained earnings is P600,000.The 20x1 net income and dividends using cost (or initial value) method that was as follows;Net IncomeP CompanyS CompanyP340,000P150,000DividendsP100,000P50,000On April 1, 20x1, S Company sold equipment with book value of P30,000 to P Company for 60,000. Thegain on the sale is included in the net income of S Company indicated above. The equipment is expected tohave to have a remaining useful life of five years from the date of sale.On September 30, 20x1, P Company sold machinery with a book value of P40,000 to S Company forP75,000. The gain on the sale is also included in the net income of P company indicated above. Themachinery is expected to last for ten (10) years from the date of sale.

Solution: Non-controlling Interest-: A Non-controlling Interest, which is also understood as a…

Answered: The Non-controlling interest in Net…

Business

Accounting

The Non-controlling interest in Net Income for 20x1:

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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