On January 2, 2014, P Company acquired 80% interest in S Company for P2,062,500 cash. On this date the outstanding capital stock and retained earnings of P Company and S Company are as follows:

 P Company

Common Stock -1,125,000

APIC- 750,000

Retained earnings- 2,625,000


S Company

Common Stock - 656,000

APiC - 0

Retained Earnings -1,593,750

There was no issuance of capital stock during the year. Non-controlling interest is measured at its fair value. Fair values of the following assets exceeded their book values as follows: Inventories, P105,000; Property and equipment (useful life, 10 years), P63,750. All other assets and liabilities are fairly valued. Goodwill if any is not impaired. On December 31, 2011 the two companies reported the following operating results:

           
P Company

Net income -892,500

Dividends paid- 262,500

 

S Company  

 Net income- 487,500

 Dividends Paid-131,250

 

1.What is the consolidated net income attributable to parent on December 31, 2014?

2.What is consolidated stockholders' equity to be reported in the consolidated statement of financial position on December 31, 2014?

Answer rating: 100% (QA)

To determine the consolidated net income attributable to the parent and consolidated stockholders eq... View the full answer