Show the solution

PROBLEM 4. Pure Corporation acquired an 80% interest in Sincere Company on January 2, 2012 for P2,520,000. On this date, the share capital and retained earnings of the two companies follow: __ Share Ca-ital P6 000 000 P2 250 000 Retained earnings 3,000,000 450,000 On January 2, 2012, the assets and liabilities of Sincere Co. were stated at their fair values except for machinery which is undervalued by P225,000 (remaining life is 3 years). On September 30, 2012, Sincere sold merchandise to Pure at an inter-company profit of P150,000; 25% was still unsold at year-end. Likewise, on October 1, 2013, Sincere purchased merchandise from Pure for P3,600,000. The selling affiliate included a 20% mark-up on cost on this sale. Only 75% of these purchases had been sold to unrelated parties as of December 31, 2013. As of December 31, 2013, goodwill was determined to be impaired by P60,000. The following is the summary of the 2013 transactions of the afliated companies: _ Net Income P1,500,000 P600,_000 Dividends declared and -aid 600 000 180 000 On the 2013 consolidated financial statements, how much would be the: I. 1. Net income attributable to Parent A. P1,638,000 B. P1,?08,500 C. P1,608,000 D. P1,686,000 2. Nonucontrolling interest in net income A. P70,500 B. P100,500 c. P82,500 D. P85,500