On January 2, 2019, Ulrich Co. purchased 75% of the outstanding shares of Neil Co. resulting to a goodwill of P60,000. On that date, the non-cash assets of Neil Co. whose book values did not equal their book values were accounts receivable which was overstated by P4,500 and equipment with a remaining 5 year life on the purchase date which was understated by P50,000. For the year 2020, Ulrich and Neil reported net income of P350,000 and P200,000 each respectively. Ulrich's beginning inventory included merchandise purchased from Neil Company amounting to P39,000 which was sold to them by Neil at a 30% markup, 80% of these goods were sold during the year. Neil, on the other hand, included inventory items which they purchased from Ulrich Co. amounting to 18,000. These goods were sold by Ulrich at a 25% markup. 90% of these goods were sold by Neil for the year.Determine the consolidated net income for 2020.
On January 2, 2019, Ulrich Co. purchased 75% of the outstanding shares of Neil Co. resulting to a goodwill of P60,000. On that date, the non-cash assets of Neil Co. whose book values did not equal their book values were accounts receivable which was overstated by P4,500 and equipment with a remaining 5 year life on the purchase date which was understated by P50,000. For the year 2020, Ulrich and Neil reported net income of P350,000 and P200,000 each respectively. Ulrich's beginning inventory included merchandise purchased from Neil Company amounting to P39,000 which was sold to them by Neil at a 30% markup, 80% of these goods were sold during the year. Neil, on the other hand, included inventory items which they purchased from Ulrich Co. amounting to 18,000. These goods were sold by Ulrich at a 25% markup. 90% of these goods were sold by Neil for the year.Determine the consolidated net income for 2020.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8MC
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Question
![On January 2, 2019, Ulrich Co. purchased 75% of the
outstanding shares of Neil Co. resulting to a goodwill of
P60,000. On that date, the non-cash assets of Neil Co.
whose book values did not equal their book values were
accounts receivable which was overstated by P4,500 and
equipment with a remaining 5 year life on the purchase date
which was understated by P50,000. For the year 2020,
Ulrich and Neil reported net income of P350,000 and
P200,000 each respectively. Ulrich's beginning inventory
included merchandise purchased from Neil Company
amounting to P39,000 which was sold to them by Neil at a
30% markup, 80% of these goods were sold during the year.
Neil, on the other hand, included inventory items which they
purchased from Ulrich Co. amounting to 18,000. These
goods were sold by Ulrich at a 25% markup. 90% of these
goods were sold by Neil for the year. Determine the
consolidated net income for 2020.
Your answer](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbbfb9a2c-68f6-432a-b7f3-6f0701aa4b8d%2F0845c981-f89a-49af-88db-0db5306dd87a%2Fplohf0b_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 2, 2019, Ulrich Co. purchased 75% of the
outstanding shares of Neil Co. resulting to a goodwill of
P60,000. On that date, the non-cash assets of Neil Co.
whose book values did not equal their book values were
accounts receivable which was overstated by P4,500 and
equipment with a remaining 5 year life on the purchase date
which was understated by P50,000. For the year 2020,
Ulrich and Neil reported net income of P350,000 and
P200,000 each respectively. Ulrich's beginning inventory
included merchandise purchased from Neil Company
amounting to P39,000 which was sold to them by Neil at a
30% markup, 80% of these goods were sold during the year.
Neil, on the other hand, included inventory items which they
purchased from Ulrich Co. amounting to 18,000. These
goods were sold by Ulrich at a 25% markup. 90% of these
goods were sold by Neil for the year. Determine the
consolidated net income for 2020.
Your answer
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