On January 1, 2021, PCO purchased 70% ownership of SCO which resulted to a gain on acquisition of P100,000. Net assets of SCO were fairly valued except for inventory which was understated by P1,500,000. A third of these inventories remained unsold as of the end of the calendar year. The operations of the two companies for 2021 are as follows: PCOSCOSalesP3,100,000P2,600,000(COGS)(1,300,000)(1,250,000)Gross profit1,800,0001,350,000(OPEX)(200,000)(150,000)Other income0200,000(Other expenses)(120,000)0Net incomeP1,480,000P 400,000Q1: In the consolidated statement of comprehensive income for the year ended December 31, 2021, how much is the cost of goods sold?1,550,0001,850,0003,550,0003,250,000 Q2: based on the information above, In the consolidated statement of comprehensive income for the year ended December 31, 2021, how much is the consolidated net income attributable to the controlling interest?Group of answer choices1,760,0001,980,0001,860,0001,830,000

PCO purchased 70% ownership in SCO.

Answered: On January 1, 2021, PCO purchased 70%…

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

Chapter12: Intangibles

Section: Chapter Questions

Problem 11E

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On January 1, 2021, PCO purchased 70% ownership of SCO which resulted to a gain on acquisition of P100,000. Net assets of SCO were fairly valued except for inventory which was understated by P1,500,000. A third of these inventories remained unsold as of the end of the calendar year.

The operations of the two companies for 2021 are as follows:

	PCO	SCO
Sales	P3,100,000	P2,600,000
(COGS)	(1,300,000)	(1,250,000)
Gross profit	1,800,000	1,350,000
(OPEX)	(200,000)	(150,000)
Other income	0	200,000
(Other expenses)	(120,000)	0
Net income	P1,480,000	P 400,000

Q1: In the consolidated statement of comprehensive income for the year ended December 31, 2021, how much is the cost of goods sold?

1,550,000

1,850,000

3,550,000

3,250,000

Q2:

based on the information above, In the consolidated statement of comprehensive income for the year ended December 31, 2021, how much is the consolidated net income attributable to the controlling interest?

Group of answer choices

1,760,000

1,980,000

1,860,000

1,830,000

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