Reference no: EM132645306
Question - Pepper Company acquired 80% of the voting stock of Salt Company on January 1, 2016, when Salt Company's retained earnings amounted to P150,000. The difference between the implied and book value on the date of acquisition was allocated as follows:
Land P50,000
Equipment (10-year) 20,000
Goodwill 40,000
Salt Company reported retained earnings of P260,000 on January 1, 2019, and P320,000 on December 31, 2019.
Salt Company reported net income of P90,000 and declared dividends of P30,000 in 2019. Also, pepper reported net income using cost method in 2019 in the amount of P724,000 with a dividends paid of P25,000 and retained earnings on December 31, 2019 of P3,500,000.
The sales, cost of sales and intercompany sales made during 2019 are as follows:
Particulars
|
Pepper Co
|
Salt Co
|
Sales
|
P2,500,000
|
P1,200,000
|
Cost of sales
|
1,250,000
|
875,000
|
Intercompany sales
|
|
|
Pepper to Salt
|
320,000
|
|
Salt to Pepper
|
|
290,000
|
There were no intercompany sales prior to 2018 and unrealized profits on January 1 and on December 31, 2019, resulting from intercompany sales are as summarized below:
Particulars Unrealized Intercompany profit on
Resulting from 1/1/19 12/31/19
Sales by Salt to Pepper P10,000 P5,000
Sales by Pepper to Salt 15,000 20,000
Required -
1. Determine the profit attributable to equity holders of parent/controlling interest (parent's interests) in consolidated net income for 2019.
2. Determine the non-controlling interest in net income for 2019.
3. Determine the consolidated/group net income for 2019.
4. Determine the consolidated retained earnings, December 31, 2019.
5. Determine the consolidated sales for 2019.
6. Determine the consolidated cost of sales for 2019.
7. Determine the consolidated gross profit for 2019.