On January 2, 2020, P Company acquired 80% investment in S Company. The acquisition cost was equal to P equity in S net assets on that date. The retained earnings of P and S are P500,000 and P100,000, respectively. During 2020, P had net income of P200,000, which included its equity in S earnings, and declared dividends of P50,000; S had net income of P40,000 and declared dividends of P20,000. On December 31, 2020, the consolidated retained earnings must be: A. P666,000 B. P650,000 C. P766,000 D. P770,000
On January 2, 2020, P Company acquired 80% investment in S Company. The acquisition cost was equal to P equity in S net assets on that date. The retained earnings of P and S are P500,000 and P100,000, respectively. During 2020, P had net income of P200,000, which included its equity in S earnings, and declared dividends of P50,000; S had net income of P40,000 and declared dividends of P20,000. On December 31, 2020, the consolidated retained earnings must be: A. P666,000 B. P650,000 C. P766,000 D. P770,000
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 20E
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On January 2, 2020, P Company acquired 80% investment in S Company. The acquisition cost was equal to P equity in S net assets on that date. The
On December 31, 2020, the consolidated retained earnings must be:
A. P666,000
B. P650,000
C. P766,000
D. P770,000
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