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On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shar XYZ's equity comprised of P50,000 share capital and P24,000 retained earnings. NCI net identifiable assets. XYZ's assets and liabilities on January 1, 2021 approximate their fair values except fo Carrying Fair XYZ, Inc. amounts values 000

On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shar XYZ's equity comprised of P50,000 share capital and P24,000 retained earnings. NCI net identifiable assets. XYZ's assets and liabilities on January 1, 2021 approximate their fair values except fo Carrying Fair XYZ, Inc. amounts values 000

Intermediate Accounting: Reporting And Analysis
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
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On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P15 per share. On this date, XYZ's equity comprised of P50,000 share capital and P24,000 retained earnings. NCI was measured at its proportionate share in XYZ's net identifiable assets. XYZ's assets and liabilities on January 1, 2021 approximate their fair values except for the following: Carrying Fair Fair value XYZ, Inc. атоunts 23,000 values adjustments (FVA) 8,000 Inventory 31,000 Equipment (4 yrs. remaining life) Accumulated depreciation Totals 10,000 60,000 (10,000) (12,000) 63,000 50,000 (2,000) 16,000 79,000 XYZ, Inc. declared and paid dividends of P10,000 during 2021. There was no impairment in goodwill. The year-end individual statements of profit or loss are shown below: Statements of profit or loss For the year ended December 31, 2021 АВС Со. XYZ, Inc. Sales 120,000 (72,000) 48,000 (10,000) (18,000) 300,000 Cost of goods sold Gross profit Depreciation expense (165,000) 135,000 (40,000) (32,000) (3,000) 8,000 Distribution costs Interest expense Dividend income Profit for the year 20,000 68,000 How much is the consolidated profit to be reported on December 31,2021?
Transcribed Image Text:On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P15 per share. On this date, XYZ's equity comprised of P50,000 share capital and P24,000 retained earnings. NCI was measured at its proportionate share in XYZ's net identifiable assets. XYZ's assets and liabilities on January 1, 2021 approximate their fair values except for the following: Carrying Fair Fair value XYZ, Inc. атоunts 23,000 values adjustments (FVA) 8,000 Inventory 31,000 Equipment (4 yrs. remaining life) Accumulated depreciation Totals 10,000 60,000 (10,000) (12,000) 63,000 50,000 (2,000) 16,000 79,000 XYZ, Inc. declared and paid dividends of P10,000 during 2021. There was no impairment in goodwill. The year-end individual statements of profit or loss are shown below: Statements of profit or loss For the year ended December 31, 2021 АВС Со. XYZ, Inc. Sales 120,000 (72,000) 48,000 (10,000) (18,000) 300,000 Cost of goods sold Gross profit Depreciation expense (165,000) 135,000 (40,000) (32,000) (3,000) 8,000 Distribution costs Interest expense Dividend income Profit for the year 20,000 68,000 How much is the consolidated profit to be reported on December 31,2021?
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