Reference no: EM132773756

On January 1, 2019, Entity A acquired 80% of outstanding ordinary shares of Entity B at a gain on bargain purchase of P 360,000. The following intercompany transactions occurred between the two entities:

1. On January 1, 2019, Entity B sold the land to Entity A with a cost of P 2,000,000 at a selling price of P 2,200,000. The land was eventually sold by Entity A to third persons during 2020.
2. On January 1, 2019, Entity A sold white machinery to Entity B with a cost of P 400,000 and accumulated depreciation of P 80,000 at a selling price of P 360,000. The remaining life of the machinery from the date of sale was 16. The residual value of white machinery is immaterial.
3. On July 1, 2020, Entity B sold black machinery to Entity A at a cost of P 540,000 and accumulated depreciation of P 360,000 at a selling price of P 120,000. The remaining life of the machinery from the date of sale was 3. The residual value of black machinery is immaterial.

For the year ended December 31, 2020, Entity A reported a net income of P 1,600,000 while Entity B reported a net income of P 1,000,000 and distributed dividends of P 300,000. Entity A accounted for its investment in Entity B using the cost method in its separate financial statements.

Problem 1: What is the noncontrolling interest in net income for 2020?

Problem 2: What is the consolidated net income attributable to parent shareholders for 2020?