Y Inc. is a wholly owned subsidiary of P Corporation. The following are excerpts from the 2019 condensed statements of financial position of the two companies: P Corp. P500,000 2.000,000 Y Inc. Sales to Y Sales to others Cost of goods sold from P Cost of goods sold from others Gross profit P1,500,000 400,000 950,000 P150,000 1,750,000 P750,000 The sales of P to Y are made on the same terms as those made to others.
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Determine the net income attributable to P Corporation.
Step by step
Solved in 2 steps
What is the formula for the "Net Income attributable to P Corporation"? How did you come up with 700,000 as the answer when:
3,500,000+2,700,000+800,000-100,000 = 6,900,000
3,500,000+2,700,000+800,000 = 7,000,000
Neither does not give 700,000.
- Selected information from the separate and consolidated income statements of CHAELISA LTD.and as subsidiary, JENSOO INC. for the year ended December 31, 2021 are as follows: CHAELISA LTD. JENSOOINC. ConsolidatedSales P600,000 P420,000 P924,000COGS 450,000 330,000 693,000Gross profit P150,000 P 90,000 P231,000 During 2021, CHAELISA LTD. sold goods to JENSOO INC. at the same mark-up on cost that CHAELISA LTD. uses for all sales. At December 31, 2021, JENSOO INC. had not paid all of these goods and still held 37.5% of them in inventory. Compute for the original cost of goods in JENSOO INC.’s inventory acquired from Apple.In 2019, entity A sold goods to its subsidiaries (entities B and C) for P500,000 and P400,000, respectively. In 2019, entity A sold goods to its associates (entities D and E) for P50,000 and P40,000 respectively. On 31 December 2019 entities B, C, D and E owed entity A P200,000, P100,000, P20,000 and P10,000, respectively. The terms and conditions of the sales to entities B, C, D and E are the same as for sales to independent third parties, ie list price on 30 days’ interest-free credit. In 2019, entity A purchased raw materials from its owner (Mr. A) for P125,000. Mr. A supplies raw materials to entity A at a discount of 20 per cent on the price at which he supplies other customers that purchase similar quantities of raw materials. In common with other customers, Mr. A supplies entity A with raw materials on 30 days’ interest-free credit. On 31 December 2019 entity A reported that it had reimbursed Mr. A’s expenses of P400,000 for leisure trips. How much is the total amount of related…Comparative income statements of Sub Corporation for the calendar years 2019, 2020, and 2021 are as follows (in thousands): 2019 2020 2021Sales $22,000 $18,500 $19,250Cost of sales 10,600 9,900 10,100Gross profit 11400 8600 9150Operating expenses 5,700 5,500 6,000Net income $ 5700 $ 3100 $ 3150ADDITIONAL INFORMATION1. Sub was an 80 percent-owned subsidiary of Pub Corporation throughout the 2019–2021 period. Pub’s separate income (excludes income from Sub) was $7,200,000, $6,600,000, and $7,500,000 in 2019, 2020, and 2021, respectively. Pub acquired its interest in Sub at its underlying book value, which was equal to fair value on July 1, 2017.2. Pub sold inventory items to Sub during 2019 at a gross profit to Pub of $720,000. Half the merchandise remained in Sub’s inventory at December 31, 2019. Total sales by Pub to Sub in 2019 were $1,800,000. The remaining merchandise was sold by Sub in 2020.3. Pub’s inventory at December 31, 2020, included items acquired from Sub on…
- Comparative income statements of Sub Corporation for the calendar years 2019, 2020, and 2021 are as follows (in thousands): 2019 2020 2021Sales $22,000 $18,500 $19,250Cost of sales 10,600 9,900 10,100Gross profit 11400 8600 9150Operating expenses 5,700 5,500 6,000Net income $ 5700 $ 3100 $ 3150ADDITIONAL INFORMATION1. Sub was an 80 percent-owned subsidiary of Pub Corporation throughout the 2019–2021 period. Pub’s…Comparative income statements of Sub Corporation for the calendar years 2019, 2020, and 2021 are as follows (in thousands): 2019 2020 2021Sales $22,000 $18,500 $19,250Cost of sales 10,600 9,900 10,100Gross profit 11400 8600 9150Operating expenses 5,700 5,500 6,000Net income $ 5700 $ 3100 $ 3150ADDITIONAL INFORMATION1. Sub was an 80 percent-owned subsidiary of Pub Corporation throughout the 2019–2021 period. Pub’s separate income (excludes income from Sub) was $7,200,000, $6,600,000, and $7,500,000 in 2019, 2020, and 2021, respectively. Pub acquired its interest in Sub at its underlying book value, which was equal to fair value on July 1, 2017.2. Pub sold inventory items to Sub during 2019 at a gross profit to Pub of $720,000. Half the merchandise remained in Sub’s inventory at December 31, 2019. Total sales by Pub to Sub in 2019 were $1,800,000. The remaining merchandise was sold by Sub in 2020.3. Pub’s inventory at December 31, 2020, included items acquired from Sub on which Sub made…Nasty is a wholly owned subsidiary of Ugly. Inventories in their individual statements of financial position at the year end are shown as: Ugly $40,000 Nasty $20,000 Sales by Ugly to Nasty during the year were invoiced at $15,000 which included a profit by Ugly of 25% on cost. Two thirds of these goods were included in inventories at the year end. At what value should inventories appear in the consolidated statement of financial position?
- Comparative income statements of Sub Corporation for the calendar years 2019, 2020, and 2021 are as follows (in thousands): 2019 2020 2021 Sales $22,000 $18,500 $19,250 Cost of sales 10,600 9,900 10,100 Gross profit 11400 8600 9150 Operating expenses 5,700 5,500 6,000 Net income $ 5700 $ 3100 $ 3150 ADDITIONAL INFORMATION Sub was an 80 percent-owned subsidiary of Pub Corporation throughout the 2019–2021 period. Pub’s separate income (excludes income from Sub) was $7,200,000, $6,600,000, and $7,500,000 in 2019, 2020, and 2021, respectively. Pub acquired its interest in Sub at its underlying book value, which was equal to fair value on July 1, 2017. Pub sold inventory items to Sub during…Kent Ltd owns all of the shares of Lodh Ltd. In relation to the following intragrouptransactions, all parts of which are independent unless specified, prepare theconsolidation worksheet adjusting entries for preparation of the consolidated financialstatements as at 30 June 2020. Assume an income tax rate of 30%. a. On 1 January 2020, Kent Ltd sold inventory costing $10,000 to Lodh Ltd at a transfer (sale) price $16,000. Lodh Ltd sold half of this inventory to an external party for $10,000 (i.e., half of the inventory is remained with Lodh Ltd at the end of the year). b. During March 2018, Lodh Ltd paid a $5,500 interim dividend. c. Kent Ltd rented a spare warehouse to Lodh Ltd. The total charge for the rental was $6,000. Lodh Ltd paid the whole amount to Kent Ltd during the year. d. On 1 July 2019, Kent…The two following separate cases show the financial position of a parent company and its subsidiary company on November 30, 2019, just after the parent had purchased 90% of the subsidiary's stock: Case I Case II P Company S Company P Company S Company Current assets $ 880,000 $260,000 $ 780,000 $280,000 Investment in S Company 190,000 190,000 Long‐term assets 1,400,000 400,000 1,200,000 400,000 Other assets 90,000 40,000 70,000 70,000 Total $2,560,000 $700,000 $2,240,000 $750,000 Current liabilities $ 640,000 $270,000 $ 700,000 $260,000 Long‐term liabilities 850,000 290,000 920,000 270,000 Common stock 600,000 180,000 600,000 180,000 Retained earnings 470,000 (40,000) 20,000 40,000 Total $2,560,000 $700,000 $2,240,000 $750,000…
- The following are summarized Balance Sheets as on March 31, 2020 H. Ltd. acquired 80% shares in S Ltd. on October 1, 2019 for $ 2,000. At the date of acquisitionall the assets and liabilities of S Ltd were reflected at fair valueThe Retained earnings of S Ltd. on April 1, 2019 was $ 200H Ltd measures the Non Controlling Interest at its proportionate share of the acquiree's netidentifiable assets.S Ltd transferred goods to H Ltd at a transfer price of $ 300. The sales policy of H Ltd is to add50 % of mark up to its cost. Two-thirds remained in inventory at the year end. Required : Calculate goodwill at the date of acquisition and unrealized profit for holding companyOn January 1, 2021, Parent Company acquires 80% of the equity interests of Subsidiary Company, a private entity, in exchange for cash of P1,500,000. The management of Parent initially measures the separately recognizable identifiable assets acquired and the liabilities assumed as of the acquisition date in accordance with the requirements of IFRS 3. The identifiable assets are measured at P2,500,000 and the liabilities assumed are measured at P500.000. Parent Company engages an independent consultant, who determines that the fair value of the 20% non-controlling interest in Subsidiary is P420,000. What is the amount of goodwill (gain or bargain purchase) from the business combination?Parent Co. owns 80% of Subsidiary Co. During 2021, Parent Co. sold goods with a 40% gross profit to Subsidiary Co. Subsidiary Co. sold all these goods in 2021. For 2021, consolidated financial statements, how should the summation of Parent Co. and Subsidiary Co.'s Income statement be adjusted? A. No adjustment is necessary. B. Sales and cost of goods sold should be reduced by 80% of the intercompany sales. C. Net income should be reduced by 80% of the gross profit on the intercompany sales. D. Sales and cost of goods sold should be reduced by the intercompany sales.