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Determine the parent income from subsidiary

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Reference no: EM133021587

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Q1. Patrick Inc. acquired an 80% interest in Sandy Company on January 1, 2013, for an amount equal to book value. An intragroup transfer of land took place between the two entities in the group in 2013 at a profit of P 10,000. The land is held by the buying entity until 2015, when it is sold to a party outside of the group for a profit of P12,000. Sandy reported net income for 2013, 2014 and 2015 of P60,000, P80,000, and P 100,000 respectively. 2013 intragroup transfer of land was upstream from Sandy to Patrick. The consolidation worksheet adjustment required on December 31, 2013, concerning the intragroup sale of land would be?

a. DR. Land,P10,000; CR.Gain on Sale Of Land, P10,000

b. DR. Retained Earnings, January l, 2013, P10,000; CR. Land, P10,000

c. DR. Investment in Sandy, P10,000; CR. Land, P10,000

d. DR. Gain on sale of Land, P10,000; CR.Land-P10,000

Q2. Patrick Inc. acquired an 80% interest in Sandy Company on January 1, 2013, for an amount equal to book value. An intragroup transfer of land took place between the two entities in the group in 2013 at a profit of P 10,000. The land is held by the buying entity until 2015, when it is sold to a party outside of the group for a profit of P12,000. Sandy reported net income for 2013, 2014 and 2015 of P60,000, P80,000, and P 100,000 respectively. 2013 intragroup transfer of land was upstream from Sandy to Patrick. Determine the parent's income from subsidiary for 2013?

a. P48,000

b. P40,000

c. P56,000

d. P60,000

Q3. Patrick Inc. acquired an 80% interest in Sandy Company on January 1, 2013, for an amount equal to book value. An intragroup transfer of land took place between the two entities in the group in 2013 at a profit of P 10,000. The land is held by the buying entity until 2015, when it is sold to a party outside of the group for a profit of P12,000. Sandy reported net income for 2013, 2014 and 2015 of P60,000, P80,000, and P 100,000 respectively. 2013 intragroup transfer of land was upstream from Sandy to Patrick. The 2015 consolidated income statement would reflect a gain on sale of land in the amount of?

a. P2,000

b. P10,000

c. P22,000

d. P12,000

Q4. Peter co. acquires a controlling interest in Sunny Co. for P120,000 in the open market. The P100 par Ordinary Share Capital of Sunny Co. at the time of acquisition is P 125,000 and its Retained Earnings amount to P50,000. Sunny Co. shares are selling at P120 per share in the open market. The percentage of control of Peter Co. over Sunny Co. is?

a. 100%

b. 70%

c. 90%

d. 80%

Reference no: EM133021587

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