S Company sells all its output at 20 percent above cost to P Corporation. P Co. purchases all its inventory from S Co.. The incomes reported by the companies over the past three years are as follows:

S Co.P. Co.

Net IncomeOperating income

2018150,000225,000

2019135,000360,000

2020240,000450,000

S Company sold inventory for P420,000, P300,000 and P320,000 in the years 2018, 2019, and 2020 respectively. P Company reported ending inventory of P120,000, P180,000 and P160,000 for 2018, 2019, and 2010 respectively. P Co. acquired 70 percent of the ownership of S Co. on January 1, 2018, at underlying book value. The fair value of the noncontrolling interest at the date of acquisition was equal to 30 percent of the book value of S Company.

Based on the information given above, what will be the consolidated net income for 2018?

a. 316,000

b. 375,000

c. 395,000

d. 355,000

A Company, B Inc., and C Corporation are parties to a consolidation agreement.Their respective assets and estimated earnings (based on pre-consolidation statements) as of January 1, 2020, the date agreement is to take effect, are:

ABC

Assets at appraised value420,000650,000375,000

Est. annual earnings contribution41,25075,00033,750

A new corporation, D, Inc. shall issue a single class of shares for the assets.Earnings in excess of 8% of the total assets are to be capitalized at 25% in determining goodwill contribution of the partners.D, Inc. shall issue shares at P10 par value equal to total assets transferred plus goodwill.Assuming that after consolidation, dividends are to be distributed to the former shareholders of A, B, and C in terms of percentage of their capital balances.Determine the total number of stocks to be issued to A, B, and C.

a. 158,260 shares

b. 156,060 shares

c. 147,940

d. 159,500 shares

S Company sells all its output at 20 percent above cost to P Corporation. P Co. purchases all its inventory from S Co.. The incomes reported by the companies over the past three years are as follows:

S Co.P. Co.

Net IncomeOperating income

2018150,000225,000

2019135,000360,000

2020240,000450,000

S Company sold inventory for P420,000, P300,000 and P320,000 in the years 2018, 2019, and 2020 respectively. P Company reported ending inventory of P120,000, P180,000 and P160,000 for 2018, 2019, and 2020 respectively. P Co. acquired 70 percent of the ownership of S Co. on January 1, 2018, at underlying book value. The fair value of the noncontrolling interest at the date of acquisition was equal to 30 percent of the book value of S Company.

Based on the information given above, what will be the income to noncontrolling interest for 2020?

a.

73,000

b.

71,275

c.

37,875

d.

70,875