Prob.

1
PP Corp owns 70% of SS Co.’s outstanding stocks, acquired on Jan. 1, 2026. SS regularly sales merchandise to PP at 150%
of SS’s cost. PP’s Dec. 31, 2026 and 2027 inventories include goods purchased intercompany of 112,500 and 33,000
respectively. The separate incomes (excluding investment income) of PP and SS for 2027 are summarized below:
PP SS
Sales 1,200,000 800,000
COGS (600,000) (500,000)
Opex (400,000) (100,000)
CI from own operations 200,000 200,000

Consolidated income allocated to Parent ______________ to NCI ______________________

Prob. 2
On Jan. 1, 2026, PP Co. purchased 75% of the outstanding stock of SS at book value. During 2027, SS sold inventory items
costing 50,000 to PP for 75,000. PP resold 60% of this inventory to outsiders during the year for 100,000. For the year
2027, PP had CI from its own operations of 200,000 and paid dividends of 120,000. SS CI for the year was 110,000, it paid
40,000 inn dividends. Consolidated CI attributable to parent _________________________

Prob. 3
On Jan. 1, 2026 PP Corp. acquired 80% of SS at book value. The ff. information is available for years 2026 and 2027:
2026 2027
CI from its own operation
PP 500,000 550,000
SS 200,000 225,000
Sales by PP to SS 100,000 120,000
COGS 60,000 60,000
Inventory at billed price – 12/31 20,000 30,000

Consolidated comprehensive income in 2026 ____________________ and 2027 _______________________

Prob. 4
PP purchased 70% of SS voting stock on May 18, 2023 at underlying value. The companies reported the ff. data with
respect to intercompany sales in 2026 and 2027:

Year Purchased by Purchase price Sold to Sale price Unsold at 12/31 Year sold outside
2026 SS 120,000 PP 180,000 45,000 2027
2027 SS 90,000 PP 135,000 30,000 2028
2028 PP 140,000 SS 280,000 110,000 2028

PP reported operating income (excluding dividend income) of 160,000 and 220,000 in 2026 and 2027 respectively. SS
reported CI of 90,000 and 85,000 in 2026 and 2027 respectively.

Consolidated income attributable to PP ____________________

Inventory balance in consolidated SFP at Dec. 31, 2027 _________________
Consolidated COGS in 2027 __________________________
Consolidated CI in 2027 ___________________________