Compute the consolidated net income

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Reference no: EM132652016

Problem - On December 31. 2015. P Company purchased 70 percent of the outstanding shares of S Company at a cost of P423250. On that date, S Company had P145,000 worth of share capital and P361500 worth of accumulated pro?ts.

For 2016, P Company had income of P290900 from its own operations and paid dividends of P145000. S Company, on the other hand reported income of P43,500 and paid dividends of P29,000. All assets and liabilities of 5 Company have book values approximately equal to their market values.

The beginning inventory of P Company includes P8,000 of merchandise purchased from S Company on December 31, 2015 at 150 percent of cost. The ending inventory of P Company includes P13,050 worth of merchandise purchased from S Company at the same mark-up. P Company uses the FIFO inventory costing. P Company uses the cost method to account for its investment is S Company.

Required -

1. Compute the consolidated net income for 2016.

2. Compute the Non-controlling Interest in Net Income of Subsidiary for 2016.

Reference no: EM132652016

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