What is the non-controlling interest in Net Income for 20x1, considering intercompany transactions? On January 1, 20x0, P Company purchased 80 percent of the outstanding sharesof S Company by paying P650,000. On that date, S Company P300,000 capitalstock and P500,000 retained earnings. An undervalued asset attributable tobuilding amounting to P75,000 with a remaining life of 25 years. All other assetsand liabilities of S Company had book value approximated their fair marketvalue.On January 1, 20x1, P's common stock and retained earnings amounted toP1,000,000 and P800,000, respectively, while S Company's retained earnings isP600,000.|The 20x1 net income and dividends using cost (or initial value) method that wasas follows;Net IncomeDividendsP CompanyP340,000P100,000S CompanyP150,000P50,000On April 1, 20x1, S Company sold equipment with book value of P30,000 to PCompany for 60,000. The gain on the sale is included in the net income of SCompany indicated above. The equipment is expected to have to have aremaining useful life of five years from the date of sale.On September 30, 20x1, P Company sold machinery with a book value ofP40,000 to S Company for P75,000. The gain on the sale is also included in thenet income of P company indicated above. The machinery is expected to last forten (10) years from the date of sale.

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What is the non-controlling interest in Net Income for 20x1, considering intercompany transactions?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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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

What is the non-controlling interest in Net Income for 20x1, considering intercompany transactions?

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
Dividends
P Company
P340,000
P100,000
S Company
P150,000
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.

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