On March 31, 2021, JISOO Company purchased 32,000 shares of the 40,000 outstanding shares of ROSE Company at a price of P1,200,000 with an excess of P30,000 over the book value of ROSE Company’s net assets. P13,000 of the excess is attributed to an undervalued equipment with a remaining useful life of 10 years from the date of acquisition and the rest of the amount is attributed to goodwill. For the year 2021, JISOO Company reported a net income of P750,000 and paid dividends of P180,000. While ROSE Company reported a net income of P240,000 which was evenly earned during the year and paid dividends to JISOO Company amounting to P39,000. Goodwill was not impaired in 2021. The retained earnings of JISOO Company at the end of 2021 per books is P1,025,000. JISOO Company uses the cost method to account for its investment in ROSE Company. Non-controlling interest is measured at fair market value. Requirement: Compute for the non-controlling interest in net assets on December 31, 2021.
On March 31, 2021, JISOO Company purchased 32,000 shares of the 40,000 outstanding shares of ROSE
Company at a price of P1,200,000 with an excess of P30,000 over the book value of ROSE Company’s
net assets. P13,000 of the excess is attributed to an undervalued equipment with a remaining useful
life of 10 years from the date of acquisition and the rest of the amount is attributed to
the year 2021, JISOO Company reported a net income of P750,000 and paid dividends of P180,000.
While ROSE Company reported a net income of P240,000 which was evenly earned during the year
and paid dividends to JISOO Company amounting to P39,000. Goodwill was not impaired in 2021.
The
uses the cost method to account for its investment in ROSE Company. Non-controlling interest is
measured at fair market value.
Requirement:
Compute for the non-controlling interest in net assets on December 31, 2021.
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