On January 1, 20x,1,P Corp. acquired 80% interest of the outstanding ordinary shares of S Corp. for P 910,000 cash. On the date of combination, S Corp reported ordinary shares of P650,000 and retained earnings of P325,000. The fair value of the non-controlling interest was P227,500. The book values equal to fair values of S Corp assets and liabilities, except for equipment which had a fair value of P162,500 greater than its book value and has a remaining life of 8 years. P Corp. reported net income of 325,000 and paid dividend of P97,500 for year 20x1 and 20x2.

S Corp. reported the following data for 20x1 and 20x2:

	Net Income	Dividend
20x1	97,500	146,250
20x2	146,250	32, 500

1. Using Equity Method, how much is the Investment in S Corp at December 31, 20x2 in the separate Financial statement of P Corp?

2. Using Equity Method, how much is the Non-Controlling interest in net in subsidiary at December 31, 20x2?

3. Using Cost Method, how much is the Non-Controlling interest in net in subsidiary at December 31, 20x2?

Answer rating: 100% (QA)

Answer Answer to 1 Note Assumed that the dividend paid by S Corp in 20X1 is out of pre acquisition p... View the full answer