On July 1, 20x6 TRUST Company purchased 80% of the outstanding shares of DUREX Company at a cost of P1,600,000. On that date, DUREX had P1,000,000 of capital stock and P1,400,0a00 of retained earnings. For 20x6, TRUST had income of P560,000 from its separate operations and paid dividends of P300,000. For 20x6, DUREX reported income of P130,000 and paid dividends of P60,000. All the assets and liabilities of DUREX have book values equal to their respective fair market values. Assume income was earned evenly throughout the year except for the intercompany transaction on October 1. On October 1, TRUST purchased an equipment from DUREX for P200,000. The book value of the equipment on that date was P240,000. The loss of P40,000 is reflected in the income of DUREX indicated above. The equipment is expected to have a useful life of 5 years from the date of sale. In the December 31, 20x6 consolidated statement of financial position, how much is the consolidated net income attributable to the parent company?

On July 1, 20x6 TRUST Company purchased 80% of the outstanding shares of DUREX Company at a cost of P1,600,000. On that date, DUREX had P1,000,000 of capital stock and P1,400,0a00 of retained earnings. For 20x6, TRUST had income of P560,000 from its separate operations and paid dividends of P300,000. For 20x6, DUREX reported income of P130,000 and paid dividends of P60,000. All the assets and liabilities of DUREX have book values equal to their respective fair market values. Assume income was earned evenly throughout the year except for the intercompany transaction on October 1. On October 1, TRUST purchased an equipment from DUREX for P200,000. The book value of the equipment on that date was P240,000. The loss of P40,000 is reflected in the income of DUREX indicated above. The equipment is expected to have a useful life of 5 years from the date of sale. In the December 31, 20x6 consolidated statement of financial position, how much is the consolidated net income attributable to the parent company?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 1MC

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