Reference no: EM132744848
APPLE COMPANY acquired 80% of the outstanding shares of BLUEBERRY Company on July 1, 2019 for $800,000. On this date BLUEBERRY Company's net assets had book values equal to their fair values except for Inventory which was understated by $20,000 and building with a remaining useful life of 10 years was understated by P50,000.
- BLUEBERRY also reports capital stock of $800,000 and retained earning of P200,000 as of July 1, 2019.
- For the year ended December 31, 2019, APPLE and BLUEBERRY Company report Income from their own operations of $250,000 and $150,000 each, income is earned evenly throughout the year and paid dividends of $200,000 and $50,000 on December 15, 2019.
- On December 31, 2021, APPLE Company and BLUEBERRY Company reports retained earnings of $2,000,000 and $400,000 each respectively,
Problem 1: Determine the Consolidated net income of the controlling interest for the year 2019.
a) 346,000
b) 348,000
c) 406,000
d) 292,000
Problem 2: Determine the consolidated retained earnings as of December 31, 2021.
a) 2,190,000
b) 2,132,000
c) 2,134,000
d) 2,188,000
Problem 3: Determine the non-controlling interest on December 31, 2019 if APPLE Company values the non-controlling interest at fair value.
a) 214,500
b) 229,000
c) 229,500
d) 214,000