The Profit attributable to equity holders of parent (Parent’s Interests/Controlling Interest in Profit) for 20x1: A. 356,500B. 362,200C. 363,075D. 386,500 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.

Answered: The Profit attributable to equity…

The Profit attributable to equity holders of parent (Parent’s Interests/Controlling Interest in Profit) for 20x1: A. 356,500 B. 362,200 C. 363,075 D. 386,500

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: These are cumulative profits which are retained in the business and not yet distributed to the…

A: We prepare the following financial statements - Income statement Balance sheet Cash flows statement…

Q: sophisticated equity method.

A: Subsidiary Account A subsidiary account is a ledger account that is maintained within a subsidiary…

Q: If Company A buys Company B with the following metrics, what is the Accretion or Dilution for…

A: Company A:Revenue: $140 millionNet Income: $45 millionShares Outstanding: 120 millionCompany…

Q: If the amount paid by an investor (parent) is less than the proportional total of the estimated fair…

A: b. Gain from bargain purchase in the income statement of the investor. In extremely rare…

Q: The maximum number of actual shareholders in an S corporation is: a. 75. b. 100. c.…

A: S corporation is a special type of closely held corporation which is established for the purpose of…

Q: How much was the gain or loss on the sale of CD shares? a. P1,100 gain b. P2,000 gain c. P15,000…

A: Gain/Loss= Net Sales Consideration - Cost of Acquisition If the result is positive, there's a…

Q: In accounting for investment in associates, where an investor is not a parent, the investor will…

A: Accounting refers to a process through which all day-to-day activities or transactions occurred or…

Q: Dividends paid to a shareholder by a corporation should be reported on which of the following forms?…

A: form 1099 DIV it is used to report the amount of ordinary dividend received. 1099 R is for…

Q: 1. How much will be the Non-controlling interest net income for 2020? 2. How much will be the…

A: Consolidated Statement: It is statement which present all income, expenses, assets and liability of…

Q: 8. If a firm consolidates subsidiaries that are not wholly owned, an income statement item is…

A: An income statement assists entrepreneurs in determining whether they can turn a profit by raising…

Q: Phlaire acquired 70 percent of Syanne on July 1, 20x5. Based on the purchase price, proportionate…

A: Upstream transaction is sale of goods by Subsidiary Co. to Parent Co. and Sales of goods by Parent…

Q: 18 If RE on 1/1 for P is 170000 JD and for S is 100000 JD, consolidated net income is 58000 JD and…

A: Consolidation is a business process wherein two or more business entities are being merged into one…

Q: The amount attributable to every share outstanding in case a corporation is liquidated. A. book…

A: Corporate finance is referred as the decision of the firm to take capital investments and other…

Q: 7. What amount of non-controlling interest is to be presented in the consolidated statement of…

A: Retained Earnings:- Retained earnings are considered as the part of profit, that is not distributed…

Q: I. Multiple Choice 1. A major disadvantage of a corporation is... a. Additional taxes b. Limited…

A: Hi Student, Since there are multiple questions, we will answer only first question. If you want…

Q: How much is the Profit attributable to equity holders of parent (Parent’s Interests/Controlling…

A: Solution: Consolidated financial statements are the financial statements of a group consisting of…

Q: If ABC Co. sold everything it owned and paid off all the company owed, the amount left over would…

A: Assets, liabilities, and equity are part of the balance sheet of a company. The balance sheet is one…

Q: Assets Parent Subsidiary Cash Accounts receivable, net Company P' 36,900 Company Р 37,400 34,200…

A: On 01.01., Parent company acquired subsidiary company = 90% Purchase consideration = 5400 shares @…

Q: The Profit Attributable to Equity Holders of Parent/ Controlling Interest (Parent’s Interests) in…

A: Consolidated net income can be defined as the total income under the control of the parent company.…

Q: A firm's retained earnings represent: Earnings set aside for a pension plan. b. a. Earnings set…

A: Retained Earnings refers to portion of profit that is ploughed back by entity to meet future growth…

Q: Share in profit of associate a. 660,000 b. 660,000 Investment in associate 1,620,000 1,840,000 C.…

A: Business combination: Business combination is defined as the process where one company acquires…

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

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

Q: For the year ended December 31, the following results were given:…

A: For year ended 31.12., Net income of parent company = P30200 Dividend paid = P15000 Net income after…

Q: If a company uses the equity method to account for an investment in another company, which of the…

A: The equity method is used when a company has ownership in another company of 20% to 50% of the…

Q: The Profit attributable to equity holders of parent (Parent’s Interests/Controlling Interest in…

A: On 01.01.20x0, P company purchased outstanding shares of S company = 80% Purchase consideration =…

Q: what amount of stockholders' equity will be reported? a. P355,000 b. P397,000 c. P419,500 d.…

A: Power Corporation Acquired 70% of Silk Corporation Dec31,20x2.

Q: The following data pertains to Traverse Co.'s investments in marketable equity securities: Select…

A: Calculations: Market value on 12/31/24 $155,000 Cost ($150,000) Unrealized gain on…

Q: Daddy Interest Son 1 Son 4 Son 2 Son 5 Son 7 Son 6 Son 3 Direct % Indirect % Non-controlling…

A: Part A) As per the given image calculation for daddy interest is shown below- Formulation-

Q: For the year ended December 31, the following results were given:…

A: Consolidated financial statements are the financial statements of a group consisting of multiple…

Q: Problem 15-56 (LO 15-4) Determine the amount of taxable dividend, nontaxable distribution, and…

A: Taxable dividend= dividend paid out from the E&P. Non taxable distribution= dividend in excess…

Q: interest Corpttal 'business in pars 2.006. p b. Nopart egueement was made u weillteh. They…

A: First of all, it is important to understand that whenever a partnership firm is formed, both the…

Q: 2. Which of the following is a share of owners in a corporation? B. capital gain A. bond C. dividend…

A: The bond represents a loan lend by an investor to the borrower. It is fixed-income security. The…

Q: What is the Consolidated/Group Net Income for 20x1, considering the intercompany transactions

A: The amount of net income computed and recorded by the parent company, as the part of combined income…

Q: What is the profit attributable to equity holders of parent/controlling interest in Consolidated Net…

A: Computation of Group Net Income Particulars Pepper Co. Salt Co. Consolidated Net Income…

Q: A shareholder in a company:

A: Shareholders A person or entity who holds the shares or stocks of a company is known as shareholders…

Q: Which of the following characteristics of a corporation limits a stockholder's loss to the amount of…

A: The question is asking about the characteristic of a corporation that protects a stockholder from…

Q: If the unrealized profit of sales from parent to a subsidiary is GHC2,000 and NCI in the subsidiary…

A: It is an downstream transaction

Q: A corporation using the equity method of accounting for its investment in a 80%–owned investee,…

A: The question is multiple choice question.A corporation using the equity method of accounting for its…

Q: 63,075

A: Consolidated financial statements are the financial statements of a group consisting of multiple…

Q: Q39 Return that a shareholder gets from the company, out of its profits, on his shareholdings, is…

A: Company means the form of business where management is separately from owner and have perpetual…

Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

The Profit attributable to equity holders of parent (Parent’s Interests/Controlling Interest in Profit) for 20x1:

A. 356,500

B. 362,200

C. 363,075

D. 386,500

PROBLEM 1
On January 1, 20x0, P Company purchased 80 percent of the outstanding shares of S Company by paying
P650,000.On that date, S Company P300,000 capital stock and P500,000 retained earnings. An
undervalued asset attributable to building amounting to P75,000 with a remaining life of 25 years. All
other 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 Income
P Company
S Company
P340,000
P150,000
Dividends
P100,000
P50,000
On April 1, 20x1, S Company sold equipment with book value of P30,000 to P Company for 60,000. The
gain on the sale is included in the net income of S Company indicated above. The equipment is expected to
have 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 for
P75,000. The gain on the sale is also included in the net income of P company indicated above. The
machinery is expected to last for ten (10) years from the date of sale.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Pizza Corporation acquired 75 percent of Slice Corporation's voting common stock on January 1, 20X4, for $354,000, when the fair value of its net identifiable assets was $470,000 and the fair value of the noncontrolling interest was $116,000. Slice reported common stock outstanding of $140,000 and retained earnings of $230,000. The excess of fair value over book value of Slice's net assets was attributed to amortizable assets with a remaining life of 10 years. On December 31, 20X4, Slice sold a building to Pizza ar recorded a gain of $22,000. Income assigned to the noncontrolling shareholders in the 20X4 consolidated income statement was $17,500. Required: a. Compute the amount of net income Slice reported for 20X4. Reported income of Slice b. Compute the amount reported as consolidated net income if Pizza reported operating income of $238,000 for 20X4. Consolidated net income
For the purposes of equity accounting, it is presumed that tne investor has significant influence over the other entity where the investor holds: Select one: 0. 75% or more of the voting power of the investee. b. 205 or more of the voting power of the investee. C. between 5% and 105 of the voting power of the investee. d. 1005 of the voting power of tne investee.
What is the Profit Attributable to Equity Holders of Parent/ Controlling Interest (Parent’s Interests) in Consolidated Net income for 2014?
When using the equity method of accounting, when is revenue recorded on the books of the investor company?a. When the fair value of the affiliate stock increases.b. When a dividend is received from the affiliate.c. When the affiliate company reports net income.d. Both b and c above.
Using the proportionate basis or partial goodwill method, compute the equity holders of parent (or controlling interest) retained earnings on January 1:A. P 48,000 C. P 84,900B. P52,100 D. P 89,000
N4 common stockholders of a business enterprise are said to be the residual owners which mean that they a. have thr rights to specific assets of the business b. are entitled to a dividend every year in which the business earns profit c. can negotiate individual comtrscts on behalf of the enterprise d. bear the ultimate risks and uncertainties and recieve the benefits if enterprise ownership.
What is the controlling (parent’s) interest – retained earnings or the consolidated retained earnings on December 31, 20x1, considering the intercompany transactions
How much is the non-controlling interest in profit of Subsidiary Company on December 31, 2x19?
4. What method normally is used to account for the ownership of a subsidiary on the parent’s financial records? a Cost model/methodb. Equity methodc. Consolidationd. Either cost model/method or equity method
when a C-Corp distributes appreciated assets to its shareholders should recognize in in the corporate return a taxable profit on the appreciation?
What is the non-controlling interest in Net Income for 20x1, considering intercompany transactions?
For the year ended December 31, the following results were given: Dividend Paid Net Income Parent Company P15,000 P30,200Subsidiary Company 4,000 9,400 Using the proportionate basis or partial goodwill method, compute the non-controlling interest on December 31.A. P 0 C. P 610B. P 540 D. P 940 Note: Just use the information provided to arrive at the answer.