Reference no: EM132668487

January 1, 2006, Peter Company purchased 80 percent of the outstanding shares of Pedro Company at a cost of P1,080,000. On that date, Pedro Company had P600,000 worth of ordinary shares and P750,000 worth of accumulated profits. For 2006, Pedro Company reported income of P270,000 and paid dividends of P90,000. All of the assets and liabilities of Pedro Company are at fair market value.

• On December 31, 2006, Peter Company sold equipment to Pedro Company for P112,500 that had a cost of P67,500. The equipment is expected to have a useful life of 10 years from this date. For the year 2006, Peter Company reported income from its own operations in the amount of P300,000, which included the gain of P45,000 on equipment sold to Pedro Company.

Required:

Problem 1: Compute the amount to be shown as consolidated net income.

Problem 2: Compute the Non-controlling Interest in Net Income of Subsidiary for 2006.

Problem 3: Compute the amount to be shown as Non-controlling Interest in Net Assets of Subsidiary on the consolidated statement of financial position as of December 31, 2006.