Transcribed Image Text: On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P15 per share. On this date, XYZ’s

Transcribed Image Text: On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P15 per share. On this date,
XYZ’s equity comprised of P50,000 share capital and P24,000 retained earnings. NCI was measured at its proportionate share in XYZ’s
net identifiable assets.
XYZ’s assets and liabilities on January 1, 2021 approximate their fair values except for the following:
Carrying
Fair
Fair value
XYZ, Inc.
amounts
23,000
values adjustments (FVA)
31,000
8,000
Inventory
Equipment (4 yrs. remaining
life)
Accumulated depreciation
Totals
60,000
(10,000) (12,000)
63,000
50,000
10,000
(2,000)
79,000
16,000
XYZ, Inc. declared and paid dividends of P10,000 during 2021. There was no impairment in goodwill. The year-end individual
statements of profit or loss are shown below:
Statements of profit or loss
For the year ended December 31, 2021
АВС Со.
XYZ, Inc.
Sales
Cost of goods sold
Gross profit
300,000
120,000
(72,000)
48,000
(10,000)
(18,000)
(165,000)
135,000
(40,000)
(32,000)
(3,000)
8,000
68,000
Depreciation expense
Distribution costs
Interest expense
Dividend income
Profit for the year
20,000
How much is the consolidated profit to be reported on December 31,2021?

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