Determine the Consolidated stockholders equity

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Reference no: EM132723815

Question - On January 1, 2006, PJ Company purchased 80% of the outstanding shares of SC Company at a cost of P720,000. On that date, SC had P400,000 of capital stock and P500,000 of retained earnings while PJ Company had capital stock of P1,000,000 and retained earnings for P600,000. All the assets and liabilities of SC Company have book values equal to their respective market values.

For 2006 PJ Company reported net income of P320,000 and paid dividends of P150,000. For 2006, SC Company reported net income of P85,000 and paid dividends of P40,000.

On January 1, 2006, PJ Company sold equipment to SC Company for P75,000. The book value of the equipment on that date was P100,000. The equipment is expected to have a useful life of five years from the date of sale. Also during that year, SC Company sold merchandise to PJ Company amounting to P80,000 which includes a profit of P20,000. 70% of these merchandise were sold by PJ to outsiders.

Determine the Consolidated stockholders equity for 2006?

a. P91,535

b. P90,860

c. P92,175

d. P89,900

Reference no: EM132723815

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