On January 1, 2020, P Company purchased 32,000 shares of the 40,000 outstanding shares of S Company at a price of P1,2000,000 with an excess of P30,000 over the book value of S Company’s net assets. P13,000 of the excess is attributed to an undervalued equipment with a remaining useful life of eight years from the date of acquisition and the rest of the amount is attributed to goodwill. For the year 2020, P Company reported a net income of P750,000 and paid dividends of P180,000. While S Company reported a net income of P240,000 and paid dividends to P Company amounting to P39,000. Goodwill has not impaired in 2020. The retained earnings of P Company at the end of 2020 per books is P1,025,000. P Company uses the cost method to account for its investment in S Company. Non-controlling interest is measured at fair market value. What is the non-controlling interest in net assets? a. 339,875 b. 337,925 c. 334,525 d. 336,475
On January 1, 2020, P Company purchased 32,000 shares of the 40,000 outstanding shares
of S Company at a price of P1,2000,000 with an excess of P30,000 over the book value of S
Company’s net assets. P13,000 of the excess is attributed to an undervalued equipment
with a remaining useful life of eight years from the date of acquisition and the rest of the
amount is attributed to
P750,000 and paid dividends of P180,000. While S Company reported a net income of
P240,000 and paid dividends to P Company amounting to P39,000. Goodwill has not
impaired in 2020. The
P1,025,000. P Company uses the cost method to account for its investment in S Company.
Non-controlling interest is measured at fair market value.
What is the non-controlling interest in net assets?
a. 339,875
b. 337,925
c. 334,525
d. 336,475
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