On February 28, 2022, P Corp. purchased 80% of S Co's P10 par ordinary shares for P986,000. On this date, the carrying amount of S's net assets was P1,000,000. The fair values of S Co's identifiable assets and liabilities were the same as their carrying amounts except for inventory which is overvalued by P15,000 and plant assets (net), which were P120,000 in excess of the carrying amount. The estimated remaining life of the asset is 5 years. For the year ended December 31, 2022, S had net income of P354,000 and paid cash dividends to P Corp. of P112,000 (all coming from post-acquisition Retained Earnings). Loss on impairment of goodwill in 2022 amounted to P20,000. P Corp. uses the fair value method in measuring non-controlling interest. Revenues were earned evenly throughout the year Determine the non-controlling interest in net asset of subsidiary on December 31, 2022.
On February 28, 2022, P Corp. purchased 80% of S Co's P10 par ordinary shares for P986,000. On this date, the carrying amount of S's net assets was P1,000,000. The fair values of S Co's identifiable assets and liabilities were the same as their carrying amounts except for inventory which is overvalued by P15,000 and plant assets (net), which were P120,000 in excess of the carrying amount. The estimated remaining life of the asset is 5 years. For the year ended December 31, 2022, S had net income of P354,000 and paid cash dividends to P Corp. of P112,000 (all coming from post-acquisition Retained Earnings). Loss on impairment of goodwill in 2022 amounted to P20,000. P Corp. uses the fair value method in measuring non-controlling interest. Revenues were earned evenly throughout the year Determine the non-controlling interest in net asset of subsidiary on December 31, 2022.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 19E
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Transcribed Image Text:On February 28, 2022, P Corp. purchased 80% of S Co's P10
par ordinary shares for P986,000. On this date, the carrying
amount of S's net assets was P1,000,000. The fair values of S
Co's identifiable assets and liabilities were the same as their
carrying amounts except for inventory which is overvalued by
P15,000 and plant assets (net), which were P120,000 in
excess of the carrying amount. The estimated remaining life
of the asset is 5 years. For the year ended December 31,
2022, S had net income of P354,000 and paid cash dividends
to P Corp. of P112,000 (all coming from post-acquisition
Retained Earnings). Loss on impairment of goodwill in 2022
amounted to P20,000.
Corp. uses the fair value method in
measuring non-controlling interest. Revenues were earned
evenly throughout the year
Determine the non-controlling interest in net asset of
subsidiary on December 31, 2022.
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