Determine the correct amount of consolidated net income

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Question - ABC acquired 80% interest in STU in 2021 at a time when STU's book values and fair values were equal. In 2022, STU sold land to ABC for P82,000 that cost P72,000. The land remained in ABC's possession until 2023 when ABC sold it outside the combined entity for P102,000. After the books were closed in 2023, it was discovered that ABC had not considered the unrealized gain from its intercompany purchase of land in preparing consolidated financial statements. The only entry on ABC's book was a debit to Land and a credit to Cash in 2021 for P82,000 and in 2021 a debit to cash for P102,000 and credit to Land for P82,000 and gain on sale of land for P20,000. Before the discovery of the error, the consolidated financial statements disclosed the following amounts: Consolidated net income P750,000, P600,000 and P910,000 for 2021, 2022, and 2023 respectively. Land P200,000, P240,000 and P300,000 for 2021, 2022, and 2023 respectively. Determine the correct amount of consolidated net income for 2023.

Reference no: EM132979040

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