3. What is the consolidated retained earnings- Dec. 31, 20X1?

PROBLEM 1 On January 1, 20x1, Jay Co, acquired 80% interest in Ping Inc. by issuing 20,000 shares with fair value of P15 per share and par value of P10 per share. On acquisition date, Jay Co. elected to measure non-controlling interest at the NCI's proportionate share in Ping Inc. net identifiable assets. Ping's shareholders' equity as of January 1, 20x1 comprises the following: At carrying amount 200,000 Share capital Retained earnings Total equity 96,000 296,000 The fair values of Ping's assets and liabilities on January 1, 20X1 are as follows: Ping Inc. Fair value Carrying Amounts Fair Value Adjustments Cash 20,000 20,000 Accounts receivable 48,000 48,000 Inventory 92,000 124,000 32,000 Equipment 200,000 240,000 40,000 Accumulated depreciation (40,000) (48,000) (8,000) Accounts payable (24,000) (24,000) Net assets 296,000 360,000 64,000 The remaining useful life of the equipment is 4 years. During 20X1, no dividends were declared by either Jay or Ping. There were also no intercompany transactions. The group determined that there is no goodwill impairment. Jay's and Ping's individual financial statements at year-end are shown below: Statements of financial position As of December 31, 20X1 Jay Co. Ping Inc. ASSETS Cash 92,000 228,000 Accounts receivable 300,000 88,000 Inventory 420,000 60,000 Investment in subsidiary (at cost) 300,000 Equipment 800,000 200,000 Accumulated depreciation (240,000) (80,000) TOTAL ASSETS 1,672,000 496,000 LIABILITIES AND EQUITY Accounts payable 172,000 120,000 Bonds payable 120,000 Total liabilities 292,000 120,000 Share capital 680,000 200,000 Share premium Retained earnings Total equity TOTAL LIABILITIES AND EQUITY 260,000 440,000 176,000 1,380,000 376,000 1,672,000 496,000 Statements of profit or loss For the year ended December 31, 20X1 Sales Cost of goods sold Gross profit Depreciation expense Distribution costs Interest expense Profit for the year Jay Co. 1,200,000 (660,000) 540,000 (160,000) (128,000) (12,000) 240,000 Ping Inc. 480,000 (288,000) 192,000 (40,000) (72,000) 80,000 PROBLEM 1 On January 1, 20x1, Jay Co, acquired 80% interest in Ping Inc. by issuing 20,000 shares with fair value of P15 per share and par value of P10 per share. On acquisition date, Jay Co. elected to measure non-controlling interest at the NCI's proportionate share in Ping Inc. net identifiable assets. Ping's shareholders' equity as of January 1, 20x1 comprises the following: At carrying amount 200,000 Share capital Retained earnings Total equity 96,000 296,000 The fair values of Ping's assets and liabilities on January 1, 20X1 are as follows: Ping Inc. Fair value Carrying Amounts Fair Value Adjustments Cash 20,000 20,000 Accounts receivable 48,000 48,000 Inventory 92,000 124,000 32,000 Equipment 200,000 240,000 40,000 Accumulated depreciation (40,000) (48,000) (8,000) Accounts payable (24,000) (24,000) Net assets 296,000 360,000 64,000 The remaining useful life of the equipment is 4 years. During 20X1, no dividends were declared by either Jay or Ping. There were also no intercompany transactions. The group determined that there is no goodwill impairment. Jay's and Ping's individual financial statements at year-end are shown below: Statements of financial position As of December 31, 20X1 Jay Co. Ping Inc. ASSETS Cash 92,000 228,000 Accounts receivable 300,000 88,000 Inventory 420,000 60,000 Investment in subsidiary (at cost) 300,000 Equipment 800,000 200,000 Accumulated depreciation (240,000) (80,000) TOTAL ASSETS 1,672,000 496,000 LIABILITIES AND EQUITY Accounts payable 172,000 120,000 Bonds payable 120,000 Total liabilities 292,000 120,000 Share capital 680,000 200,000 Share premium Retained earnings Total equity TOTAL LIABILITIES AND EQUITY 260,000 440,000 176,000 1,380,000 376,000 1,672,000 496,000 Statements of profit or loss For the year ended December 31, 20X1 Sales Cost of goods sold Gross profit Depreciation expense Distribution costs Interest expense Profit for the year Jay Co. 1,200,000 (660,000) 540,000 (160,000) (128,000) (12,000) 240,000 Ping Inc. 480,000 (288,000) 192,000 (40,000) (72,000) 80,000