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On January 1, 2021, Patter Corp. purchased 80% of the outstanding
shares of Saturn Co. at a cost of P1,620,000. On that date, Saturn had
P600,000 of ordinary shares and P1,000,000 of
the assets and liabilities of Saturn Co. have book values approximately
equal to their respective market values, except for equipment with fair
market value increase of 50,000 (remaining life of 4 years). For 2022, the
operating results of Patter and Saturn are: Net income P1,000,000 and
P500,000, respectively; Dividends paid, P200,000 and P80,000,
respectively.
During 2022, Patter Corp. sold merchandise to Saturn at 120% of its cost,
the same as that used in 2021 sales. The inventory of Saturn on January
1, 2022 included P19,200 of merchandise purchased from Patter Corp. in
2021, while its December 31, 2022 inventory included P36,000 of
merchandise purchased from Patter Corp. in 2022. The Retained
Earnings beg of Saturn in 2022 was P1,200,000. Patter uses the
proportionate method in measuring NCI. Impairment loss was estimated
at P20,000 and 30,000 in 2021 and 2022, respectively, based on partial
goodwill recognized.
How much is the consolidated net income attributable to parent?
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How much is the
How much is the
- The DeBlois Family Co. acquired 40% of Orange Beach Co. with a $500,000 payment on January 1, 2023. The equivalent net book value (40% share) of Orange Beach on the date of acquisition was $425,000. $50,000 of the excess payment was attributable to equipment with a 10-year remaining life. The remainder of the excess payment was not attributable to any identifiable item. Orange Beach Co. Reported net income of $40,000 in 2023. No dividends were paid out. On January 1, 2024, DeBlois Family Co. Acquired an additional 50% ownership share in Orange Beach Co. With a cash payment of $700,000. The fair value of the noncontrolling interest was determined to be $140,000 on the date of acquisition. The total fair value of Orange Beach's identifiable assets and liabilities on January 1, 2024, was $1,000,000. The trading value of stock shares remained the same as acquisition date prices for several months after January 1, 2024. What amount should be reported as consolidated goodwill on January 1,…arrow_forwardOn July 1, 2022, Alicia Company purchased 25% of Clarkson Company's ordinary shares. No goodwill resulted from the acquisition; however, the purchase difference of P1,000,000 was allocated to an undervalued equipment with a remaining useful life of five years. Alicia appropriately carries this investment using equity method and the balance of the investment account was P12,000,000 at December 31, 2022. Clarkson reported profit of P20,000,000 for the year ended December 31, 2022 and paid Alicia dividends of P1,000,000 on December 31, 2022. How much did Alicia pay for its 25% interest in Clarkson Company? A P10,400,000 B) P9,900,000 C) P10,600,000 D P9,650,000arrow_forwardOn January 1, 2022, Aronsen Company acquired 90 percent of Sledel Company's outstanding shares. Sledel had a net book value on that date of $450,000: common stock ($12 par value) of $240,000 and retained earnings of $210,000. Aronsen paid $691,200 for this Investment. The acquisition-date fair value of the 10 percent noncontrolling Interest was $76,800. The excess fair value over book value associated with the acquisition was used to increase land by $222,000 and to recognize copyrights (12-year remaining life) at $96,000. Subsequent to the acquisition, Aronsen applied the Initial value method to its Investment account. In the 2022-2023 period, the subsidiary's retained earnings Increased by $230,000. During 2024, Siedel earned Income of $94,000 while declaring $34,000 in dividends. Also, at the beginning of 2024, Siedel Issued 4,000 new shares of common stock for $52 per share to finance the expansion of its corporate facilities. Aronsen purchased none of these additional shares and…arrow_forward
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