What the consolidated retained earnings must be

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Problem 1: On January 2, 2020, Galatians Company acquired 80% investment in Philippians Company. The acquisition cost was equal to Galatians equity in Philippians net assets on that date. The retained earnings of Galatians and Philippians are P500,000 and P100,000, respectively. During 2020, Galatians had net income of P200,000, which included its equity in Philippians earnings, and declared dividends of P50,000; Philippians had net income of P40,000 and declared dividends of P20,000. On December 31, 2020, the consolidated retained earnings must be:

a. P650,000

b. P666,000

c. P770,000

d. P766,000

Reference no: EM132807332

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