P Corporation acquired an 80% interest in S Company on January 1, 2020 for P425,000. On this date, the share capital and retained earnings of two companies were as follows: P Corporation S Company P175,000 Share Capital P530,000 Retained Earnings 380,000 35,000 The assets and liabilities of S Company were stated at their fair values when Pacquired its 80% interest and the fair value method was used to initially measure the NCI. Net income and dividends for 2020 for the affililated companies were: P Corporation S Company Net Income P105,000 P31,500 Dividends Declared 63,000 17,500 End of the year valuation indicates P2,400 impairment in goodwill (partial). 1. Consolidated retained earnings at December : 31, 2020. 2. Goodwill in the consolidated balance sheet at December 31, 2020.
P Corporation acquired an 80% interest in S Company on January 1, 2020 for P425,000. On this date, the share capital and retained earnings of two companies were as follows: P Corporation S Company P175,000 Share Capital P530,000 Retained Earnings 380,000 35,000 The assets and liabilities of S Company were stated at their fair values when Pacquired its 80% interest and the fair value method was used to initially measure the NCI. Net income and dividends for 2020 for the affililated companies were: P Corporation S Company Net Income P105,000 P31,500 Dividends Declared 63,000 17,500 End of the year valuation indicates P2,400 impairment in goodwill (partial). 1. Consolidated retained earnings at December : 31, 2020. 2. Goodwill in the consolidated balance sheet at December 31, 2020.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 30E
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Transcribed Image Text:PROBLEM I.
P Corporation acquired an 80% interest in S Company on January 1, 2020 for P425,000. On this date, the share capital and
retained earnings of two companies were as follows:
P Corporation
S Company
Share Capital
P530,000
P175,000
35,000
380,000
The assets and liabilities of S Company were stated at their fair values when Pacquired its 80% interest and the fair value
method was used to initially measure the NCI. Net income and dividends for 2020 for the affiliated companies were:
Р Согрoration
Retained Earnings
S Company
Net Income
P105,000
P31,500
Dividends Declared
End of the year valuation indicates P2,400 impairment in goodwill (partial).
1. Consolidated retained earnings at December 31, 2020.
2. Goodwill in the consolidated balance sheet at December 31, 2020.
63,000
17,500
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