Several years ago, Kille Company purchased 80% interest of BILLE Company for an amount equal to the
Question:
Several years ago, Kille Company purchased 80% interest of BILLE Company for an amount equal to the fair value of Billes’s net assets. On March 9, 2022, Kille sold inventory to Bille for P150,000 of which P50,000 was unsold as of December 31, 2022. The beginning inventory of Bille includes P30,000 worth of merchandise purchased from Kille. For the year ended December 31, 2022, Kille reported a profit of P200,000 and paid dividends of P60,000. Bille has a net income and dividends paid of P90,000, and P45,000, respectively for 2022. Kille sells merchandise at a profit rate of 25% based on cost, while Bille has a profit rate of 30% based on cost.
Required
Compute the consolidated net income.
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones