On January 2, 2020, P Company acquired 80% interest in S Company for P4,125,000 cash. On...

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On January 2, 2020, P Company acquired 80% interest in S Company for P4,125,000 cash. On this date, the outstanding ordinary share capital and accumulated profits of P Company and S Company are as follows: P Company Ordinary share capital Share premium Accumulated P2,250,000 1,500,000 5,250,000 S Company Net income Dividends paid P Company P1,785,000 525,000 1. Compute for the consolidated shareholders' equity. P1,312,000 3,187,500 profits (losses) There was no issuance of ordinary shares during the year. Noncontrolling interest is initially measured at fair value. Fair value of the following assets of S Company exceeded their book values as follows: Inventories, P210,000; Property and equipment (remaining useful life 10 years), P127,500. All other assets and liabilities are fairly valued. Goodwill if any is not impaired. On December 31, 2020, the two companies reported the following operating results: S Company P975,000 262,500 On January 2, 2020, P Company acquired 80% interest in S Company for P4,125,000 cash. On this date, the outstanding ordinary share capital and accumulated profits of P Company and S Company are as follows: P Company Ordinary share capital Share premium Accumulated P2,250,000 1,500,000 5,250,000 S Company Net income Dividends paid P Company P1,785,000 525,000 1. Compute for the consolidated shareholders' equity. P1,312,000 3,187,500 profits (losses) There was no issuance of ordinary shares during the year. Noncontrolling interest is initially measured at fair value. Fair value of the following assets of S Company exceeded their book values as follows: Inventories, P210,000; Property and equipment (remaining useful life 10 years), P127,500. All other assets and liabilities are fairly valued. Goodwill if any is not impaired. On December 31, 2020, the two companies reported the following operating results: S Company P975,000 262,500

Answer rating: 100% (QA)

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