Pedro Corporation owns an 80% interest in Simon Company. In the consolidated financial statements on December 2020, the carrying amount of Simon’s net assets if P5,500,000 and the carrying amount of the non-controlling interest in Simon Company (including the non-controlling interest’s share of accumulated other comprehensive income) is P300,000. On January 1, 2021, Pedro Corporation decided to sell 50% of their interest in Simon Company to outsiders for cash proceeds of P3,750,000. As a result of this transaction, Pedro Corporation loses control of Simon Company but retains a 40% interest in the former subsidiary valued at P2,000,000. What is the gain in disposal or deconsolidation?
Pedro Corporation owns an 80% interest in Simon Company. In the consolidated financial statements on December 2020, the carrying amount of Simon’s net assets if P5,500,000 and the carrying amount of the non-controlling interest in Simon Company (including the non-controlling interest’s share of accumulated other comprehensive income) is P300,000. On January 1, 2021, Pedro Corporation decided to sell 50% of their interest in Simon Company to outsiders for cash proceeds of P3,750,000. As a result of this transaction, Pedro Corporation loses control of Simon Company but retains a 40% interest in the former subsidiary valued at P2,000,000. What is the gain in disposal or deconsolidation?
Can you help me out, thank you!
Step by step
Solved in 2 steps
