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Assignment 4 Inter Company Transactions INVTY

The document outlines inter-company transactions and their impact on consolidated financial statements for three companies: Papa Corp, Pidro Corp, and Pat Corp. It provides specific sales, cost of goods sold, and inventory details necessary for calculating consolidated sales, cost of goods sold, and non-controlling interest. The document includes numerical data for each company to facilitate the consolidation process for the year 2017.

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Chloe Ann Cabaylo
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97 views1 page

Assignment 4 Inter Company Transactions INVTY

The document outlines inter-company transactions and their impact on consolidated financial statements for three companies: Papa Corp, Pidro Corp, and Pat Corp. It provides specific sales, cost of goods sold, and inventory details necessary for calculating consolidated sales, cost of goods sold, and non-controlling interest. The document includes numerical data for each company to facilitate the consolidation process for the year 2017.

Uploaded by

Chloe Ann Cabaylo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Business Combination

Inter-Company Transactions - Inventory


Assignment – 4

1. Papa Corp owns 75% of the outstanding stock of Son Corp, acquired at book value in 2015. Selected information from
the accounts of Papa Corp and Son Corp for 2017 are as follows;

Papa Son

Sales 900,000 500,000

Cost of Goods Sold 490,000 190,000

During 2017 Papa sold merchandise to Son for P50,000 at gross profit of P20,000. Half of this merchandise remained in Son’s
inventory at December 31, 2017. Son’s December 31, 2016 inventory included unrealized profit of P4,000 on goods acquired from
Papa.

In the consolidated CI for Papa Corp and subsidiary for the year 2017, consolidated sales and cost of goods sold should be:
Sales , Cost of Goods Sold

2. Pidro Corp owns 80% interest in Sisa Co and at December 31, 2016, PIdro’s investment in Sisa under the cost method was
equal to 80% of Sisa’s stockholders’ equity. During 2017, Sisa sells merchandise to Pidro for P100,000, at a gross profit to
Sisa of P20,000. At December 31, 2017 half of this merchandise is included in Pidro’s inventory.
Separate incomes for Pidro and Sisa for 2017 are summarized as follows;

PIDRO SISA
SALES P500,000 P300,000
COST OF SALES (250,000) (200,000)
OPERATING EXPENSES (125,000) ( 40,000)
CI from owns operation P125,000 P60,000
======== ========

In the consolidated statement of CI for 2017, NCI in CI of subsidiary is

3. Pat Corp owns 70% of Susan Co’s outstanding stock acquired on January 1, 2016. Susan regularly sells merchandise to Pat at
150% of Susan’s cost. Pat’s December 31, 2016 and 2017 inventories include goods purchased intercompany of P112,500
and P33,000, respectively. The separate incomes (excluding investment income) of Pat and Susan for 2017 are summarized
below;

PAT SUSAN
Sales P1,200,00 P800,000
Cost of goods sold (600,000) (500,000)
Operating Expenses (400,000) (100,000)

CI from owns operations P200,000 P200,000


========= =======

Consolidated CI should be allocated to parent and NCI in the amount of: PARENT , NCI

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