P Company acquired 70% of the ordinary shares of S Company at a time when S Company’s book values and fair values were equal. Separate income of P and Sfor 2022 are as follows: P S Sales 7,000,000 4,000,000 Cost of Sales 4,000,000 2,000,000 Dividend Revenue 490,000 0 Net Income 1,800,000 1,000,000 Intercompany sales from P to S for 2021 and 2022 are as follows: Cost Selling Price Sold as of year-end 2021 2,496,000 3,900,000 40% 2022 1,650,000 2,750,000 50% For the year 2022, compute for The consolidated Cost of Sales.

P Company acquired 70% of the ordinary shares of S Company at a time when S Company’s book values and fair values were equal. Separate income of P and Sfor 2022 are as follows: P S Sales 7,000,000 4,000,000 Cost of Sales 4,000,000 2,000,000 Dividend Revenue 490,000 0 Net Income 1,800,000 1,000,000 Intercompany sales from P to S for 2021 and 2022 are as follows: Cost Selling Price Sold as of year-end 2021 2,496,000 3,900,000 40% 2022 1,650,000 2,750,000 50% For the year 2022, compute for The consolidated Cost of Sales.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 23E

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A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…
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