On January 1, 2021, PLDT acquired 60% of outstanding ordinary shares of Smart Inc. with a gain on bargain purchase amounting to P1,000,000. The following additional data are provided: On January 1, 2021, PLDT sold a black equipment to Smart with cost of P1,000,000 and accumulated depreciation of P400,000 at a selling price of P900,000. The black equipment has original life of 5 years with no residual value. On October 1, 2021, Smart sold inventory to PLDT at a gross profit of P200,000. 60% of these inventories were sold by PLDT to third persons on year 2021 while the remainders were sold on year 2022. On July 1, 2022, Smart sold a white equipment to PLDT with cost of P500,000 and accumulated depreciation of P300,000 at a selling price of P150,000. The white equipment has original life of 10 years with no residual value. On April 1, 2022, PLDT sold inventory to Smart at a gross profit of P300,000. 20% of these inventories were sold by Smart to third persons on year 2022 while the remainders were sold on year 2023. On July 1, 2022, Smart leased a space to PLDT at month rental of P20,000. On December 1, 2022, PLDT provided telecommunication services at an amount of P100,000 to Smart. On year 2022, PLDT reported net income of P5,000,000 and declared dividends of P2,000,000 while Smart reported net income of P1,000,000 and declared dividends of P500,000. PLDT accounted its Investment in Smart in its separate financial statements using cost method. Required: Determine the following Consolidated net income attributable to parent’s shareholders for the year ended December 31, 2022 Noncontrolling interest in net income for the year ended December 31, 2022 Consolidated depreciation expense for the year ended December 31, 2022 Consolidated book value of equipment as of December 31, 2022
On January 1, 2021, PLDT acquired 60% of outstanding ordinary shares of Smart Inc. with a gain on bargain purchase amounting to P1,000,000. The following additional data are provided: On January 1, 2021, PLDT sold a black equipment to Smart with cost of P1,000,000 and accumulated depreciation of P400,000 at a selling price of P900,000. The black equipment has original life of 5 years with no residual value. On October 1, 2021, Smart sold inventory to PLDT at a gross profit of P200,000. 60% of these inventories were sold by PLDT to third persons on year 2021 while the remainders were sold on year 2022. On July 1, 2022, Smart sold a white equipment to PLDT with cost of P500,000 and accumulated depreciation of P300,000 at a selling price of P150,000. The white equipment has original life of 10 years with no residual value. On April 1, 2022, PLDT sold inventory to Smart at a gross profit of P300,000. 20% of these inventories were sold by Smart to third persons on year 2022 while the remainders were sold on year 2023. On July 1, 2022, Smart leased a space to PLDT at month rental of P20,000. On December 1, 2022, PLDT provided telecommunication services at an amount of P100,000 to Smart. On year 2022, PLDT reported net income of P5,000,000 and declared dividends of P2,000,000 while Smart reported net income of P1,000,000 and declared dividends of P500,000. PLDT accounted its Investment in Smart in its separate financial statements using cost method. Required: Determine the following Consolidated net income attributable to parent’s shareholders for the year ended December 31, 2022 Noncontrolling interest in net income for the year ended December 31, 2022 Consolidated depreciation expense for the year ended December 31, 2022 Consolidated book value of equipment as of 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 8MC
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On January 1, 2021, PLDT acquired 60% of outstanding ordinary shares of Smart Inc. with a gain on bargain purchase amounting to P1,000,000. The following additional data are provided:
- On January 1, 2021, PLDT sold a black equipment to Smart with cost of P1,000,000 and
accumulated depreciation of P400,000 at a selling price of P900,000. The black equipment has original life of 5 years with no residual value. - On October 1, 2021, Smart sold inventory to PLDT at a gross profit of P200,000. 60% of these inventories were sold by PLDT to third persons on year 2021 while the remainders were sold on year 2022.
- On July 1, 2022, Smart sold a white equipment to PLDT with cost of P500,000 and accumulated depreciation of P300,000 at a selling price of P150,000. The white equipment has original life of 10 years with no residual value.
- On April 1, 2022, PLDT sold inventory to Smart at a gross profit of P300,000. 20% of these inventories were sold by Smart to third persons on year 2022 while the remainders were sold on year 2023.
- On July 1, 2022, Smart leased a space to PLDT at month rental of P20,000.
- On December 1, 2022, PLDT provided telecommunication services at an amount of P100,000 to Smart.
- On year 2022, PLDT reported net income of P5,000,000 and declared dividends of P2,000,000 while Smart reported net income of P1,000,000 and declared dividends of P500,000.
- PLDT accounted its Investment in Smart in its separate financial statements using cost method.
Required: Determine the following
- Consolidated net income attributable to parent’s shareholders for the year ended December 31, 2022
- Noncontrolling interest in net income for the year ended December 31, 2022
- Consolidated depreciation expense for the year ended December 31, 2022
- Consolidated book value of equipment as of December 31, 2022
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