Pepper Company acquired 80% of the voting stock of Salt Company on January 1, 2011, when Salt Company's retained earnings amounted to 130,000. The difference between the implied and book value and fair values of the non-cash assets on the date of acquisition was allocated as follows: Land Equipment (10-year life) Goodwill P50, 000 20, 000 40, 000 • Salt Company reported retained earnings of P 260, 000 on January 1, 2014, and 320,000 on December 31, 2014. • Salt Company reported net income of P90,000 and declared dividends of P30,000 in 2014. • Pepper reported operating income in 2014 in the amount of P700,000 with dividends paid of P25,000 and retained earnings on December 31, 2014, of P3,500,000. The sales, cost of sales and intercompany sales made during 2014 are as follows: Реррer Co. P 2,500,000 1,250,000 Salt Co. Sales 1,200,000 875,000 Cost of Sales Intercompany sales: Pepper to Salt Salt to Pepper 320, 000 290, 000 There were no intercompany sales prior to 2013 and unrealized profits on January 1 and on December 31, 2014, resulting from intercompany sales are summarized below: Unrealized Intercompany Profit on Resulting from: Sales by Salt Company to Pepper Company Sales by Pepper Company to Salt Company Jan. 01, 2014 P 10,000 15,000 Dec. 31, 2014 P 5,000 20,000
Pepper Company acquired 80% of the voting stock of Salt Company on January 1, 2011, when Salt Company's retained earnings amounted to 130,000. The difference between the implied and book value and fair values of the non-cash assets on the date of acquisition was allocated as follows: Land Equipment (10-year life) Goodwill P50, 000 20, 000 40, 000 • Salt Company reported retained earnings of P 260, 000 on January 1, 2014, and 320,000 on December 31, 2014. • Salt Company reported net income of P90,000 and declared dividends of P30,000 in 2014. • Pepper reported operating income in 2014 in the amount of P700,000 with dividends paid of P25,000 and retained earnings on December 31, 2014, of P3,500,000. The sales, cost of sales and intercompany sales made during 2014 are as follows: Реррer Co. P 2,500,000 1,250,000 Salt Co. Sales 1,200,000 875,000 Cost of Sales Intercompany sales: Pepper to Salt Salt to Pepper 320, 000 290, 000 There were no intercompany sales prior to 2013 and unrealized profits on January 1 and on December 31, 2014, resulting from intercompany sales are summarized below: Unrealized Intercompany Profit on Resulting from: Sales by Salt Company to Pepper Company Sales by Pepper Company to Salt Company Jan. 01, 2014 P 10,000 15,000 Dec. 31, 2014 P 5,000 20,000
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
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 19E
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What is the Non-controlling interest in net income for 2014?
Transcribed Image Text:Pepper Company acquired 80% of the voting stock of Salt Company on January 1, 2011, when
Salt Company's retained earnings amounted to 130,000. The difference between the implied and
book value and fair values of the non-cash assets on the date of acquisition was allocated as
follows:
Land
P50, 000
20, 000
Equipment (10-year life)
Goodwill
40, 000
• Salt Company reported retained earnings of P 260, 000 on January 1, 2014, and 320,000
on December 31, 2014.
Salt Company reported net income of P90,000 and declared dividends of P30,000 in
2014.
• Pepper reported operating income in 2014 in the amount of P700,000 with dividends paid
of P25,000 and retained earnings on December 31, 2014, of P3,500,000.
The sales, cost of sales and intercompany sales made during 2014 are as follows:
Реpper Co.
P 2,500,000
Salt Co.
Sales
1,200,000
875,000
Cost of Sales
1,250,000
Intercompany sales:
Pepper to Salt
Salt to Pepper
320, 000
290, 000
There were no intercompany sales prior to 2013 and unrealized profits on January 1 and on
December 31, 2014, resulting from intercompany sales are summarized below:
Unrealized Intercompany
Profit on
Resulting from:
Sales by Salt Company to Pepper Company
Sales by Pepper Company to Salt Company
Jan. 01, 2014
P 10,000
15,000
Dec. 31, 2014
P 5,000
20,000
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