Anthem Co. acquired 60% of the outstanding shares of Bethel Co. on January 2, 2021. Anthem Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of Anthem Co. and Bethel Co. for 2022 are as follows: Anthem Co. Bethel Co. Net Sales P875,000 P350,000 Cost of Sales 525,000 210,000 Gross Profit 350,000 140,000 Operating Expenses 105,000 52,500 Operating Income 245,000 87,500 Dividend Income 56,000 0 Net Income P301,000 P87,500 Bethel Co. made sales to Anthem Co. of P112,000 in 2021 and P168,000 in 2022. Anthem Co. reported inventory on December 31, 2021 amounting to P70,000 of which 20% comes from Bethel Co. and inventory on December 31, 2022 amounting to P84,000 of which 30% comes from Bethel Co. Anthem Co. made sales to Bethel Co. of P273,000 in 2021 and P338,000 in 2022. Bethel reported inventory coming from Anthem Co. as of December 31, 2021 and December 31, 2022 in the amount of P54,600 and P152,100, respectively. Anthem Co. uses 30% mark-up on cost and Bethel Co. uses 25% mark-up on cost for their selling prices. Anthem Co. and Bethel Co. declared and paid dividends in 2022 amounting to P105,000 and P57,500, respectively. Compute for the consolidated sales.

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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Anthem Co. acquired 60% of the outstanding shares of Bethel Co. on January 2, 2021. Anthem Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of Anthem Co. and Bethel Co. for 2022 are as follows:

	Anthem Co.	Bethel Co.
Net Sales	P875,000	P350,000
Cost of Sales	525,000	210,000
Gross Profit	350,000	140,000
Operating Expenses	105,000	52,500
Operating Income	245,000	87,500
Dividend Income	56,000	0
Net Income	P301,000	P87,500

Bethel Co. made sales to Anthem Co. of P112,000 in 2021 and P168,000 in 2022.
Anthem Co. reported inventory on December 31, 2021 amounting to P70,000 of which 20% comes from Bethel Co. and inventory on December 31, 2022 amounting to P84,000 of which 30% comes from Bethel Co.
Anthem Co. made sales to Bethel Co. of P273,000 in 2021 and P338,000 in 2022.
Bethel reported inventory coming from Anthem Co. as of December 31, 2021 and December 31, 2022 in the amount of P54,600 and P152,100, respectively.
Anthem Co. uses 30% mark-up on cost and Bethel Co. uses 25% mark-up on cost for their selling prices.
Anthem Co. and Bethel Co. declared and paid dividends in 2022 amounting to P105,000 and P57,500, respectively.

Compute for the consolidated sales.

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