On January 4, 2022, Party Corporation purchase 80% of Summer Company's ordinary share for P810,000 worth of its own shares of stocks currently selling at P60 per share. Fair value of Summer Co's assets and liabilities are equal to fair value except for undervalued depreciable asset for P140,00 with economic life of ten (10) years. Non-controlling interest is measured at fair value on date of acquisition. On the date of acquisition, shareholder's equity of two companies are as follows: Party Corporation Summer Company Ordinary Share P1,312,500 P300,000 Retained Earnings 1,950,000 525,000 On December 31, 2022, Summer Company reported net income of P181,250 and paid dividends of P30,000 to the non-controlling interest. Party reported net earnings of P375,500 and paid dividends of P122,500. Goodwill had been impaired and should be reported at P22,500 on December 31, 2022. (INPUT YOUR ANSWERS IN FIGURES. DO NOT PUT ANY COMMA, PESO SIGN, DECIMALS, AND EXTRA SPACES) 1. How much is the Non-Controlling Interest in Net Income of Subsidiary (NCINIS)? 2. How much is the consolidated shareholders' equity as of December 31, 2022?
On January 4, 2022, Party Corporation purchase 80% of Summer Company's ordinary share for P810,000 worth of its own shares of stocks currently selling at P60 per share. Fair value of Summer Co's assets and liabilities are equal to fair value except for undervalued depreciable asset for P140,00 with economic life of ten (10) years. Non-controlling interest is measured at fair value on date of acquisition. On the date of acquisition, shareholder's equity of two companies are as follows: Party Corporation Summer Company Ordinary Share P1,312,500 P300,000 Retained Earnings 1,950,000 525,000 On December 31, 2022, Summer Company reported net income of P181,250 and paid dividends of P30,000 to the non-controlling interest. Party reported net earnings of P375,500 and paid dividends of P122,500. Goodwill had been impaired and should be reported at P22,500 on December 31, 2022. (INPUT YOUR ANSWERS IN FIGURES. DO NOT PUT ANY COMMA, PESO SIGN, DECIMALS, AND EXTRA SPACES) 1. How much is the Non-Controlling Interest in Net Income of Subsidiary (NCINIS)? 2. How much is the consolidated shareholders' equity 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 19E
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Transcribed Image Text:On January 4, 2022, Party Corporation purchase 80% of Summer Company's ordinary share for P810,000 worth of its
own shares of stocks currently selling at P60 per share. Fair value of Summer Co's assets and liabilities are equal to fair
value except for undervalued depreciable asset for P140,00 with economic life of ten (10) years. Non-controlling
interest is measured at fair value on date of acquisition. On the date of acquisition, shareholder's equity of two
companies are as follows:
Party Corporation
Summer Company
Ordinary Share
P1,312,500
P300,000
Retained Earnings
1,950,000
525,000
On December 31, 2022, Summer Company reported net income of P181,250 and paid dividends of P30,000 to the
non-controlling interest. Party reported net earnings of P375,500 and paid dividends of P122,500. Goodwill had been
impaired and should be reported at P22,500 on December 31, 2022. (INPUT YOUR ANSWERS IN FIGURES. DO NOT
PUT ANY COMMA, PESO SIGN, DECIMALS, AND EXTRA SPACES)
1. How much is the Non-Controlling Interest in Net Income of Subsidiary (NCINIS)?
2. How much is the consolidated shareholders' equity as of December 31, 2022?
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