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Y Inc. is a wholly owned subsidiary of P Corporation. The following are excerpts from the 2019 condensed statements of financial position of the two companies: P Corp. P500,000 2.000,000 Y Inc. Sales to Y Sales to others Cost of goods sold from P Cost of goods sold from others Gross profit P1,500,000 400,000 950,000 P150,000 1,750,000 P750,000 The sales of P to Y are made on the same terms as those made to others.

Y Inc. is a wholly owned subsidiary of P Corporation. The following are excerpts from the 2019 condensed statements of financial position of the two companies: P Corp. P500,000 2.000,000 Y Inc. Sales to Y Sales to others Cost of goods sold from P Cost of goods sold from others Gross profit P1,500,000 400,000 950,000 P150,000 1,750,000 P750,000 The sales of P to Y are made on the same terms as those made to others.

FINANCIAL ACCOUNTING
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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Determine the net income attributable to P Corporation.

Y Inc. is a wholly owned subsidiary of P Corporation. The following are excerpts from the 2019 condensed statements of financial position of the two companies: P Corp. P500,000 2,000,000 Y Inc. Sales to Y Sales to others Cost of goods sold from P Cost of goods sold from others Gross profit P1,500,000 400,000 950,000 P150,000 1,750,000 P750,000 The sales of P to Y are made on the same terms as those made to others.
Transcribed Image Text:Y Inc. is a wholly owned subsidiary of P Corporation. The following are excerpts from the 2019 condensed statements of financial position of the two companies: P Corp. P500,000 2,000,000 Y Inc. Sales to Y Sales to others Cost of goods sold from P Cost of goods sold from others Gross profit P1,500,000 400,000 950,000 P150,000 1,750,000 P750,000 The sales of P to Y are made on the same terms as those made to others.
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What is the formula for the "Net Income attributable to P Corporation"? How did you come up with 700,000 as the answer when:

          3,500,000+2,700,000+800,000-100,000 = 6,900,000 

          3,500,000+2,700,000+800,000 = 7,000,000

Neither does not give 700,000.

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