On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shares with a market price of P45 per share. The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for the following: Merchandise inventory’s fair value is lower than the book balance by 150,000. Equipment-A, with 2 years remaining useful life, costing P300,000 is understated by P50,000. Land with a fair value of P500,000 is recognized in the books amounting to P350,000. The following events happened to Luna Corp. Equipment-A was sold in June 30, 2023 for P320,000. 60% of merchandise inventory were sold in 2022. There is no movement as to the ordinary shares of Luna Corp during the year. The unadjusted trial balance as of December 31, 2022 were as follows: Lucas Company Luna Corp Cash 2,240,000 1,800,000 Trade Receivables 1,000,000 960,000 Merchandise Inventory 2,320,000 740,000 Furniture, net 820,000 540,000 Equipment, net 1,540,000 660,000 Land 880,000 3,000,000 Trademark, net 60,000 240,000 Investment in Luna 4,250,000 Cost of Good Sold 5,500,000 3,840,000 Expenses 3,240,000 1,620,000 Dividends Declared 1,280,000 1,920,000 TOTAL 23,130,000 15,320,000 Liabilities 1,570,000 1,700,000 Ordinary shares 3,600,000 2,700,000 Retained Earnings 1/02/22 5,200,000 1,860,000 Sales 10,730,000 7,940,000 Gain on sale of furniture 50,000 120,000 Dividend Income 1,980,000 1,000,000 TOTAL 23,130,000 15,320,000 https://www.chegg.com/homework-help/questions-and-answers/january-1-2022-lucas-company-acquired-85-outstanding-shares-luna-corp-consideration-transf-q94275595 WALANG SGOT SIRA IMAGE Goodwill, if any, is impaired by 100,000 in 2022. How much is the consolidated net income attributable to parent in December 31, 2022? a. 5,397,000 b. 5,428,875 c. 5,418,250 d. 5,386,375 How much is the consolidated net income attributable to non-controlling interest In December 31, 2022? a. 531,000 b. 536,625 c. 529,125 d. 534,750 PLEASE PROVIDE SOLUTION

On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shares with a market price of P45 per share. The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for the following: Merchandise inventory’s fair value is lower than the book balance by 150,000. Equipment-A, with 2 years remaining useful life, costing P300,000 is understated by P50,000. Land with a fair value of P500,000 is recognized in the books amounting to P350,000. The following events happened to Luna Corp. Equipment-A was sold in June 30, 2023 for P320,000. 60% of merchandise inventory were sold in 2022. There is no movement as to the ordinary shares of Luna Corp during the year. The unadjusted trial balance as of December 31, 2022 were as follows: Lucas Company Luna Corp Cash 2,240,000 1,800,000 Trade Receivables 1,000,000 960,000 Merchandise Inventory 2,320,000 740,000 Furniture, net 820,000 540,000 Equipment, net 1,540,000 660,000 Land 880,000 3,000,000 Trademark, net 60,000 240,000 Investment in Luna 4,250,000 Cost of Good Sold 5,500,000 3,840,000 Expenses 3,240,000 1,620,000 Dividends Declared 1,280,000 1,920,000 TOTAL 23,130,000 15,320,000 Liabilities 1,570,000 1,700,000 Ordinary shares 3,600,000 2,700,000 Retained Earnings 1/02/22 5,200,000 1,860,000 Sales 10,730,000 7,940,000 Gain on sale of furniture 50,000 120,000 Dividend Income 1,980,000 1,000,000 TOTAL 23,130,000 15,320,000 https://www.chegg.com/homework-help/questions-and-answers/january-1-2022-lucas-company-acquired-85-outstanding-shares-luna-corp-consideration-transf-q94275595 WALANG SGOT SIRA IMAGE Goodwill, if any, is impaired by 100,000 in 2022. How much is the consolidated net income attributable to parent in December 31, 2022? a. 5,397,000 b. 5,428,875 c. 5,418,250 d. 5,386,375 How much is the consolidated net income attributable to non-controlling interest In December 31, 2022? a. 531,000 b. 536,625 c. 529,125 d. 534,750 PLEASE PROVIDE SOLUTION

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 8MC

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On January 1, 2022, Lucas Company acquired 85% of outstanding shares of Luna Corp. The consideration transferred includes cash payment of P2,000,000 and issuance of 50,000 shares with a market price of P45 per share.

The book value of Luna Corp.’s identifiable net assets approximate its fair value, except for the following:

Merchandise inventory’s fair value is lower than the book balance by 150,000.
Equipment-A, with 2 years remaining useful life, costing P300,000 is understated by P50,000.

Land with a fair value of P500,000 is recognized in the books amounting to P350,000.

The following events happened to Luna Corp.

Equipment-A was sold in June 30, 2023 for P320,000.
60% of merchandise inventory were sold in 2022.

There is no movement as to the ordinary shares of Luna Corp during the year.

The unadjusted trial balance as of December 31, 2022 were as follows:

Lucas Company	Luna Corp
Cash	2,240,000	1,800,000
Trade Receivables	1,000,000	960,000
Merchandise Inventory	2,320,000	740,000
Furniture, net	820,000	540,000
Equipment, net	1,540,000	660,000
Land	880,000	3,000,000
Trademark, net	60,000	240,000
Investment in Luna	4,250,000
Cost of Good Sold	5,500,000	3,840,000
Expenses	3,240,000	1,620,000
Dividends Declared	1,280,000	1,920,000
TOTAL	23,130,000	15,320,000
Liabilities	1,570,000	1,700,000
Ordinary shares	3,600,000	2,700,000
Retained Earnings 1/02/22	5,200,000	1,860,000
Sales	10,730,000	7,940,000
Gain on sale of furniture	50,000	120,000
Dividend Income	1,980,000	1,000,000
TOTAL	23,130,000	15,320,000

https://www.chegg.com/homework-help/questions-and-answers/january-1-2022-lucas-company-acquired-85-outstanding-shares-luna-corp-consideration-transf-q94275595 WALANG SGOT SIRA IMAGE

Goodwill, if any, is impaired by 100,000 in 2022.

How much is the consolidated net income attributable to parent in December 31, 2022?

a. 5,397,000

b. 5,428,875

c. 5,418,250

d. 5,386,375

How much is the consolidated net income attributable to non-controlling interest In December 31, 2022?

a. 531,000

b. 536,625

c. 529,125

d. 534,750

PLEASE PROVIDE SOLUTION

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