Required
Philippians Company acquired 70% of the ordinary shares of Seth Company at a time when Seth
Company’s book values and fair values were equal. Separate income of Philippians and Seth for 2022 are
as follows:
Philippians Seth
Sales 7,000,000 4,000,000
Cost of Sales 4,000,000 2,000,000
Dividend Revenue 490,000 0
Net Income 1,800,000 1,000,000
Intercompany sales from Philippians to Seth for 2021 and 2022 are as follows:
Cost Selling Price Sold as of year-end
2021 2,496,000 3,900,000 40%
2022 1,650,000 2,750,000 50%
Required
For the year 2022, compute for the following:
1. The consolidated Cost of Sales.
2. Net income attributable to the parent.
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