Fried Inc. purchased 90% ownership of Chicken Corp. in 2020, at underlying book value. On that date, the fair value of non-controlling interest was equal to 10% of the book value of Chicken Corp. Fried Inc. purchased inventory from Chicken Corp. for P270,000 on September 1, 2021, and resold the 70% of the inventory to unrelated parties on December 5, 2021 for P300,000. Chicken Corp. produced the inventory sold to Fried Inc. for 201,000. The entities had no other transactions during 2021. What amount of consolidated net income will be assigned to Fried Inc. in 2021?* a. P 111,000 b. P 60,300 c. P 154,470 d. P 159,300
Fried Inc. purchased 90% ownership of Chicken Corp. in 2020, at underlying book value. On that date, the fair value of non-controlling interest was equal to 10% of the book value of Chicken Corp. Fried Inc. purchased inventory from Chicken Corp. for P270,000 on September 1, 2021, and resold the 70% of the inventory to unrelated parties on December 5, 2021 for P300,000. Chicken Corp. produced the inventory sold to Fried Inc. for 201,000. The entities had no other transactions during 2021. What amount of consolidated net income will be assigned to Fried Inc. in 2021?* a. P 111,000 b. P 60,300 c. P 154,470 d. P 159,300
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 34P
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Fried Inc. purchased 90% ownership of Chicken Corp. in 2020, at underlying book value. On that date, the fair value of non-controlling interest was equal to 10% of the book value of Chicken Corp. Fried Inc. purchased inventory from Chicken Corp. for P270,000 on September 1, 2021, and resold the 70% of the inventory to unrelated parties on December 5, 2021 for P300,000. Chicken Corp. produced the inventory sold to Fried Inc. for 201,000. The entities had no other transactions during 2021. What amount of consolidated net income will be assigned to Fried Inc. in 2021?*
a. P 111,000
b. P 60,300
c. P 154,470
d. P 159,300
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