Reference no: EM132655246
Questions -
Q1. On January 2, 2020, Popol Corporation purchase 80% of Seed Company's common stock for P216, 000. P10, 000 of the excess is attributed to goodwill and the balance to a depreciable asset with an economic life of 10 years. On the date of acquisition, Seed reported common stock outstanding of P80, 000 and retained earnings of P140, 000, and Popol reported common stock outstanding of P350, 000 and retained earnings of P520, 000.
On December 31, 2020, Seed reported a comprehensive income of P35, 000 and paid dividends of P15, 000. Popol reported CI from separate operations of P95, 000 and paid dividends of P46, 000. Goodwill had been impaired and should be reported at P2, 000 on December 31, 2013.
1. What is the consolidated CI on December 2020?
2. What is the consolidated retained earnings on December 2020?
3. How much is the NCI on CI of the subsidiary on December 2020?
4. What is the balance of NCI on December 31, 2013?
5. What is the consolidated CI attributable to parent on December 31, 2013?
Q2. Polo Company purchased 60% of Star Company's voting stocks for P252, 000 on January 1, 2017. Star reported a total equity of P400, 000 at the time of acquisition. The excess is allocated to equipment with an expected life of 10 years from acquisition date.
During 2020, Polo purchased inventory for P20, 000 and sold the full amount to Star Company for P30, 000. On December 31, 2020, Star's ending inventory included P6, 000 of items purchased from Polo. Also in 2020, Star purchased inventory for P50, 000 and sold the units to Polo for P80, 000. Polo included P20, 000 of its purchase from Star in ending inventory on December 2020.
The comprehensive income of two companies revealed the following:
|
|
Polo
|
Star
|
|
Sales
|
400,000
|
200,000
|
|
Divided Income
|
25,000
|
0
|
|
Total Income
|
425,000
|
200,000
|
|
Cost of Goods Sold
|
250,000
|
120,000
|
|
Other Expenses
|
70,000
|
35,000
|
|
Total Expense
|
320,000
|
155,000
|
|
Comprehensive Income
|
105,000
|
45,000
|
1. What is the amount of consolidated sales in 2020?
2. What is the amount of consolidated cost of goods sold for 2020?
Q3. On January 1, 2020, P Company purchased 80% of the outstanding shares of S Company at a cost of P700, 000. On that date, S Company had P300, 000 of capital stock and P500, 000 of retained earnings.
For 2020, P Company had CI of P300, 000 from its own operations and paid dividends of P50, 000. For 2020, S Company reported CI of P150, 000 and paid dividends of P50, 000. All of the assets and liabilities of S Company had a book value approximately equal to fair values.
On April 1, 2020, S Company sold equipment with a book value of P30, 000 to P for P60, 000. The gain on sale is included in the CI of S Company indicated above. The equipment is expected to have a useful life of 5 years from the date of the sale.
Required: Compute consolidated CI attributable to parent for 2020.