Reference no: EM132790886
On January 1, 2020, Plow Company purchased an 80% interest in Slow Co. for P280,000. On this date, Slow Company had Ordinary share capital of P100,000 and Retained Earnings of P50,000. An examination of Slow Company's assets and liabilities revealed that book values were equal to market values all except plant and equipment (net) which had a book value of P200,000 and a market value of P250,000, and inventory which had a book value of P60,000 and a market value of P80,000. The plant and equipment had an expected remaining life of 5 years, and the inventory could all be sold in 2020. Plow Company's income from its own operations was P70,000 in 2020 and P80,000 in 2021.
- Slow Company's income was P60,000 in 2020 and P50,000 in 2021. Slow Company did not pay any dividends on either year. Goodwill impairment losses were P5,000 in 2014 and P4,000 in 2015.
Required:
problem 1. Entries that Plow Company would have made in 2020 and 2021 with respect to its investment in Slow Company.
problem 2. Elimination entries for consolidated statement working papers on December 31, 2020 and December 31, 2020. Plow Company elects to measure non-controlling interest at its proportionate share of the identifiable net assets.
problem 3. Schedular calculation of consolidated net income for 2020 and 2021.
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