Reference no: EM132973037
Question - Pure Corporation acquired an 80% interest in Sincere Company on January 2, 20x6 for P2,520,000. On this date, the share capital and retained earnings of the two companies follow:
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Pure Co
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Sincere Co
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Share Capital
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6,000,000
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2,250,000
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Retained Earnings
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3,000,000
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450,000
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On January 2, 20x6, the assets and liabilities of Sincere Co were stated at their fair values except for machinery which is P225,000 lower than its fair value (remaining life is 3 years). On September 30, 20x6, Sincere sold merchandise to Pure at an inter-company profit of P150,000; 25% was still unsold at year-end. Likewise, on October 1, 20x7, Sincere purchased merchandise from Pure for P3,600,000. The selling affiliate included a 20% mark-up on cost on this date. Only 75% of these purchases had been sold to unrelated parties as of December 31, 20x7. As of December 31, 20x7, goodwill was determined to be impaired by P60,000. The following is the summary of the 20x7 transactions of the affiliated companies:
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Pure Co
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Sincere Co
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Net Income
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1,500,000
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600,000
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Dividends declared
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600,000
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180,000
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Required - What is the amount of the following to be presented in the consolidated financial statements for 20x7 if the non-controlling interest is stated at fair value.
a. Non-controlling interest in net income.
b. Net Income Attributable to Parent.
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