Reference no: EM132971489
Question - STAREX, INC., a 75% owned subsidiary of PUREHATCH COMPANY, sold merchandise during 2020 to its parent company for P 288,000. The merchandise cost STAREX, INC. P 201,600, 25% of the transferred merchandise remained in PUREHATCH COMPANY's ending inventory. STAREX's gross profit has been the same rate over the past three (3) years. On January 1, 2020, PUREHATCH has P9,600 worth of merchandise purchased from STAREX in 2019. For the year 2020, STAREX, INC. reported a net income of P 288,000 and PUREHATCH COMPANY reported net income (including dividend income of P 115,200) of P 528,000.
Required -
1. Calculate Purehatch Company's investment income from Starbucks, Inc. in 2020.
2. Determine non-controlling interests in the net income of the subsidiary for 2020.
3. Show consolidated net income for 2020, and allocate to Controlling interests and to Non-controlling interests.
4. Working paper elimination entries for 2020.
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