Problem 2: A Co. acquired 60% of the outstanding ordinary shares of B Co. on January...

 

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Problem 2: A Co. acquired 60% of the outstanding ordinary shares of B Co. on January 1, 2014. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income statements of A Co. and B Co. for 2015 were as follows: B A P875,000 Net Sales P350,000 Cost of Sales 525,000 210,000 Gross Profit P350,000 P140,000 Operating expenses 105,000 52,500 Operating income P245,000 P87,500 Dividend income 56,000 P301,000 Net income P87,500 • There was an upstream sales of P112,000 in 2014 and P168,000 in 2015. • The buying affiliate reported inventory on December 31, 2014 amounting to P70,000 of which 20% comes from the selling affiliate and inventory on December 31, 2015 amounting to P84,000 of which 30% comes from the selling affiliate. ● A Co. uses 30% mark up on cost and B Co. uses 25% mark up on cost for their selling prices. A Co. and B Co. declared and paid dividends in 2015 amounting to P84,000 and P70,000 respectively. • On January 1, 2015, B Co. has ordinary shares of P320,000; share premium of P120,000 and retained earnings of P160,000. How much is the non-controlling interest in the net assets of the subsidiary (NCINAS) at the end of 2015? A. P296,156 B. P244,984 C. P246,104 D. P245,024 Problem 2: A Co. acquired 60% of the outstanding ordinary shares of B Co. on January 1, 2014. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income statements of A Co. and B Co. for 2015 were as follows: B A P875,000 Net Sales P350,000 Cost of Sales 525,000 210,000 Gross Profit P350,000 P140,000 Operating expenses 105,000 52,500 Operating income P245,000 P87,500 Dividend income 56,000 P301,000 Net income P87,500 • There was an upstream sales of P112,000 in 2014 and P168,000 in 2015. • The buying affiliate reported inventory on December 31, 2014 amounting to P70,000 of which 20% comes from the selling affiliate and inventory on December 31, 2015 amounting to P84,000 of which 30% comes from the selling affiliate. ● A Co. uses 30% mark up on cost and B Co. uses 25% mark up on cost for their selling prices. A Co. and B Co. declared and paid dividends in 2015 amounting to P84,000 and P70,000 respectively. • On January 1, 2015, B Co. has ordinary shares of P320,000; share premium of P120,000 and retained earnings of P160,000. How much is the non-controlling interest in the net assets of the subsidiary (NCINAS) at the end of 2015? A. P296,156 B. P244,984 C. P246,104 D. P245,024

Answer rating: 100% (QA)

Answer Note Non Controlling Interest Computed on Subsidary equity so A co Parent I... View the full answer