Reference no: EM132744941

JENNIE Company acquired 80% of the outstanding shares of MINNIE Company for $800,000 on January 1, 2019. On this date, MINNIE reports capital stock of $300,000, Share Premium of $350,000 and Retained Earnings of P200,000.

• Moreover, an examination of MINNIE's net assets revealed that their book values were equal to their fair values except for Inventory which was understated by $50,000, Equipment with a 5-year remaining life was overstated by $75,000, Building with a 10-year life was understated by $100,000 and Land was understated by $20,000.
• The non-controlling interest is stated at fair value. JENNIE Company pays $20,000 direct acquisition costs related to the acquisition and $15,000 indirect costs. $5,000 direct costs and $20,000 indirect costs however, remain unpaid.
• If JENNIE and MINNIE Company are not small-medium enterprises and reports net income of P400,000 and P200,000 each in 2019

Problem 1: Determine the non-controlling interest net income to be reported in 2019.

a) 20,500
b) 31,000
c) 21,500
d) 20,000