Reference no: EM133150085

Questions -

Q1. On January 1, 2022, P Company acquired 80% of S Company for P2,000,000. The fair value of identifiable net assets is P1,800,000. NCI is measured at fair value. During 2022, P Company ships merchandise to S Company costing P800, 000 at 25% above cost. Additional data are as follows: P Company S Company Sales 5,500,000 2,500,000 Cost of Sales 3,200,000 1,600,000 Operating Expense 650,000 300,000 The ending inventories of S Company includes merchandise from P Company amounting to P50,000. Impairment of goodwill is P20,000.

a. Consolidated cost of sales is reported at?

b. The net income attributable to parent is?

Q2. Growth Corporation acquired an 70% interest in Expanded Company on January 1, 2022 for P245,000. On this date the share capital and retained earnings of two companies were as follows: Growth Expanded Share Capital P630,000 P175,000 Retained Earnings 280,000 35,000 The assets and liabilities of Expanded were stated at their fair values when Growth acquired its 70% interest and the proportionate share in net identifiable asset was used to initially measure the NCI. Growth uses the cost method to account for its investment in Expanded. Net income and dividends for 2022 for the affiliated companies were: Growth Expanded Net Income P120,000 P50,000 Dividends Paid 42,000 18,000 Dividends Payable, 12/31/2021 26,000 10,000 Dividends Payable, 12/31/2022 31,000 8,000 End of the year evaluation indicates P5,000 impairment of goodwill.

c. How much is the consolidated net income?

d. How much is the consolidated retained earnings at December 31, 2022?