Total P92,000

NCI 30% (27,600)

Consolidated total comprehensive income

attributable to parent P182,40

42. 0
PP's selling expenses P110,000
SS's selling expenses 40,000
Eliminate freight costs for intercompany sales (5,000)
consolidated selling expenses P145,000

43. Under the acquisition method, the consolidated financial statements should report the

combined operations of the parent and the subsidiary from the date of acquisition and

onwards. Income of the subsidiary before the acquisition is not to be recognized by the parent.

Unrealized profit in inventory should be eliminated from the combined total comprehensive

income.

The computation therefore of the consolidated total comprehensive income on December 31,

2013 is as follows:

PJ total comprehensive income from own operations P1,575,000

SG total comprehensive income from own operations

(6/30 to 12/31) 375,000

Unrealized profit in ending inventory (45,000)

Consolidated total comprehensive income, December

P1,900,000 31, 2013 44.

PX's current assets P320,000

Eliminations:
Unrealized profit in ending

inventory:
Downstream Upstream
Ending inventory P 15,000 P60,000
Gross profit rate 33.33% 20%
Unrealized profit ( P12,000 (17,000)
Consolidated current P3O3,000

asset
45. When preparing the consolidated statement of comprehensive income, intercompany

sales and purchases are to be eliminated. As a result of the intercompany sales Pat has

recorded P250,000 sales and Sir has recorded P250,000 cost of sales which should be

eliminated. Therefore Pat should report P500,000 as cost of sales in the consolidated

statement of comprehensive income, computed as follows:

Pat's cost of sales P400,000

Sir's cost of sales 350,000

Intercompany sales and purchases ( 250,000)

Consolidated cost of sales P500,000