Intercompany Sales
Problem solving exercises (test bank)
Pat Company acquired inventories on June 12, 2007, from its 75% owned subsidiary, Sat Company. The
inventories were sold for 86,000 including the 20% markup on cost. Out of these inventories, 60% were
sold to outsiders. During the year, Pat Co. reported net income of P185,000 and Sat Co. reported net
income of P125,000. Based on the above transaction, how much is the realized profit to be allocated to
minority interest in 2008?
a. P5,733
b. P2,867
c. P2,150
d. P1,433
Panasonic Corporation has several subsidiaries that are included in its consolidated financial statements.
In its December 31,2013, trial balance, Panasonic had the following inter-company balances before
eliminations:
Debit Credit
Current receivables due from Sony Co. P32,000
Non-current receivables from Sony Co. 114,000
Cash advance to Sure Corp. 6,000
Cash advance from Stop Co. P15,000
Inter-company payable to Stop Co. 101,000
In its December 31,2013 consolidated statement of financial position, what amount should Panasonic
report as inter-company receivables?
a. P152,000
b. P146,000
c. P 36,000
d. P -0-
Pete Company acquired a 70% interest in Steve Company in 2011. During 2012 Steve sold merchandise
to Pete for P10,000 at a gross profit of P2,000. The merchandise was resold during 2013 by Pete to
outsiders for P15,000. The net income of Steve company for the year ended December 31, 2012 is
P80,000
Compute the NCI in Steve total comprehensive income for 2012.
a. P24,000
b. P23,400
c. P24,400
d. P24,600
Intercompany Sales
Problem solving exercises (test bank)
Pal, Inc. owns 80% of Spirit Company's common stock. During October 2013, Spirit sold merchandise to
Pal for P100,000. At December 31, 2013, one-half of the merchandise remained in Pal's inventory. For
2013, gross profit percentages were 30% for Pal and 40% for Spirit.
What amount of unrealized intercompany profit in ending inventory at December 31, 2013 should be
eliminated in consolidation?
a. P40,000
b. P20,000
c. P16,000
d. P15,000
On January 1, 2011 SST Company purchased a computer with an expected life of 5 years. On January 1,
2013 SST company sold the computer to PMN corporation and recorded the following entry:
Cash 39,000
Accumulated Depreciation 16,000
Computer Equipment 40,000
Gain on sale of Equipment 15,000
PMN Corporation holds 60% of the voting shares of SST Company. SST Company and PMN Corporation
reported income from its own operations of P45,000 and P85,000 for 2013 respectively. There is no
change in the estimated life of the equipment as a result of intercompany sale.
What is the consolidated total comprehensive income attributable to parent for 2013.
a. P103,000
b. P106,000
c. P112,000
d. P130,000
