Reference no: EM133125965

Question - On December 31, 2019, P Company purchased 70 percent of the outstanding shares of S Company for P245,000. On that date, S Company had P100,000 of capital stock and P250,000 of retained earnings. For 2020, P Company had CI of P200,000 from its own operations and paid dividends of P100,000. For 2020 S Company reported CI of P30,000 and paid dividends of P20,000. All assets and liabilities of S Company have book values approximately equal to their book values. The beginning inventory of P Company includes P6,000 of merchandise purchased from S Company on December 31, 2019 at 150 percent of cost. The ending inventory of P Company includes P9,000 of merchandise purchased from S Company at the same mark-up. P Company uses FIFO inventory costing.

Required -

1. What is the consolidated CI attributable to parent for the year 2020?

a. P229,000

b. P220,300

c. P250,000

d. P230,000

2. What is the consolidated retained earnings on December 21, 2019?

a. P586,000

b. P585,800

c. P587,400

d. P591,800