poration owhed sub several years ago at book value (whic years 2020 and 2021, John and Fred John's separate income Fred's net inc 2020. 2021 P300,000 P400,000 80,000 60,000

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 28P
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Fred Corporation is a 90% owned subsidiary of John Corporation acquired
several years ago at book value (which is equal to fair value). For the
years 2020 and 2021, John and Fred report the following:
John's separate income Fred's net income
2020.
2021
P300,000 P400,000
80,000
60,000
The only intercompany transaction between John and Fred during 2020
and 2021 was the January 8, 2020 sale of land. The land had a book value
of P20,000 and was sold intercompany for P30,000, its appraised value at
the time of sale.
1.)Assuming that it was Fred who sold the land to John (Upstream sale)
on 2020 and subsequently sold it to third party on 2021, how much is the
non-controlling interest in net income of subsidiary for 2021?
a. P7,000
b. P6,000
c. P5,000
d. P6,100
Transcribed Image Text:Fred Corporation is a 90% owned subsidiary of John Corporation acquired several years ago at book value (which is equal to fair value). For the years 2020 and 2021, John and Fred report the following: John's separate income Fred's net income 2020. 2021 P300,000 P400,000 80,000 60,000 The only intercompany transaction between John and Fred during 2020 and 2021 was the January 8, 2020 sale of land. The land had a book value of P20,000 and was sold intercompany for P30,000, its appraised value at the time of sale. 1.)Assuming that it was Fred who sold the land to John (Upstream sale) on 2020 and subsequently sold it to third party on 2021, how much is the non-controlling interest in net income of subsidiary for 2021? a. P7,000 b. P6,000 c. P5,000 d. P6,100
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