Reference no: EM132974032
Questions -
Q1. DARA Co, a local company in the Philippines purchased a 30% interest of Foreign Co, a foreign entity for FC50,000 on account on January 1, 2017. The company settled the account on March 1, 2017. On January 1, the book values of Foreign Co approximated their fair values. During the year, Foreign Co NOVA declared a FC7,000 cash dividend on July 1, 2017 payable on August 31, 2017 and a FC3,500 cash dividend on November 1, 2017 payable on January 31, 2018. Foreign Co also reports net income of FC20,000. The peso equivalent of the foreign currencies on their respective dates are as follows; January 1, 2017, P45; March 1,2017, 44; July 1, 2017, P41.50; August 31, 2017, P42.10; November 1, 2017, P42; December 31, 2017, P40; January 31, 2018 P41 and the average for the year 2017, P43.
Determine the net increase or decrease in the company's current earnings because of the investment Foreign Company.
Q2. LYSOL Co sold merchandise to a foreign company on April 1, 2018 for FC35,000 payable on August 31, 2018. At the time of sale, the spot rate was P27 per foreign currency. By the fiscal year ending June 30, 2018, the exchange rate was P16 per foreign currency and P19 per foreign currency when payment was received.
Determine the amount to be reported as foreign exchange gain or loss on the company's current earnings.
Q3. On January 1, 2016, YELLOW Company purchased 80% of the shares of PINK Corp at book value, which is the same as its fair value at the date of acquisition. The shareholders' equity of PINK Corporation on this date showed: Ordinary share Capital - P1,140,000 and Accumulated profits - P980,000. On April 30, 2016, PINK Corp acquired a used machinery for P168,000 from YELLOW Company that was being carried in the latter's books at P210,000. The asset still has a remaining useful life of 5 years. On the other hand, On August 31, 2015, YELLOW Company purchased land from PINK for P690,000. The original cost of this land was P550,000. Furthermore, there was an upstream sales of P112,000 in 2015 and P168,000 in 2016. The buying affiliate reported inventory on December 31, 2015 amounting to P70,000 of which 20% comes from the selling affiliate and inventory on December 31, 2016 amounting to P84,000 of which 30% comes from the selling affiliate. YELLOW Company uses a 30% mark-up on cost and PINK Corp uses a 25% mark-up on cost from their selling prices. Net income of YELLOW Company and PINK Corp for 2016 amounted to P720,000 and P310,000. Dividends paid totaled to P230,000 and P105,000 for YELLOW Company and PINK Corp., respectively.
How much is the non-controlling interest in net assets at December 31, 2016?