Chapter 17

Multiple Choice Problems

67. c
Consolidated Net Income for 20x4
P Company’s net income from own/separate operations P360,000
Realized profit in beginning inventory of S Company (downstream sales) 0
Unrealized profit in ending inventory of S Company (downstream sales)… (_0)
P Company’s realized net income from separate operations*…….….. P360,000
S Company’s net income from own operations P135,000
Realized profit in beginning inventory of P Company (upstream sales)
[P105,000 x 20/120) 17,500
Unrealized profit in ending inventory of P Company (upstream sales)
[P157,500 x 20/120) ( 26,250 )
S Company’s realized net income from separate operations*…….….. P126,250 126,250
Total P 486,250
Less: Amortization of allocated excess…………………… _0
Consolidated Net Income for 20x4 P486,250
Less: Non-controlling Interest in Net Income* * 1,610
Controlling Interest in Consolidated Net Income or Profit attributable to
equity holders of parent – 20x4………….. P 51,490
*that has been realized in transactions with third parties.
Or, alternatively
Consolidated Net Income for 20x4
P Company’s net income from own/separate operations P360,000
Realized profit in beginning inventory of S Company (downstream sales) 0
Unrealized profit in ending inventory of S Company (downstream sales)… (_0)
P Company’s realized net income from separate operations*…….….. P360,000
S Company’s net income from own operations ( P135,000
Realized profit in beginning inventory of P Company (upstream sales)
[P105,000 x 20/120) 17,500
Unrealized profit in ending inventory of P Company (upstream sales)
[P157,500 x 20/120) ( 26,250 )
S Company’s realized net income from separate operations*…….….. P126,250 126,250
Total P 486,250
Less: Non-controlling Interest in Net Income* * P 37,875
Amortization of allocated excess…………………… 0 37,875
Controlling Interest in Consolidated Net Income or Profit attributable to
equity holders of parent………….. P 448,375
Add: Non-controlling Interest in Net Income (NCINI) _37,875
Consolidated Net Income for 20x4 P 486,250
*that has been realized in transactions with third parties.

**Non-controlling Interest in Net Income (NCINI) for 20x4

S Company’s net income of Subsidiary Company from its own operations
(Reported net income of S Company) P 135,000
Realized profit in beginning inventory of P Company (upstream sales) 17,500
Unrealized profit in ending inventory of P Company (upstream sales) ( 26,250)
S Company’s realized net income from separate operations……… P 126,250
Less: Amortization of allocated excess 0
P126,250
Multiplied by: Non-controlling interest %.......... 30%
Non-controlling Interest in Net Income (NCINI) – partial goodwill P 37,875
Less: NCI on goodwill impairment loss on full goodwill 0
Non-controlling Interest in Net Income (NCINI) – full goodwill P 37,875
68. a – refer to No. 67 for computation.