How much of the consolidated net income attributable

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Question - Pinky Company has 80% holdings over Silk Company. During 2018. Pinky Company sold merchandise to Silk Company for P120000 and in turn, purchased P510000 from Silk Company. Both sales were made on account. Intercompany sales of merchandise during 2018 were made at the following gross profit rates:

Downstream intercompany sale 25% based on sales

Upstream intercompany sale 20% based on cost

As of December 31, 2018, 30% of all intercompany sales remain in ending inventory of the buying affiliate. The beginning inventory of Pinky includes P2,500 worth of merchandise acquired from Silk on which Silk reported a profit of P1,000 while the beginning inventory of Silk also includes P3,000 of merchandise acquired from Pinky at 35% mark-up. Using cost method, the following results of operations for 2018 are as follows:

 

Pinky Company

Silk Company

Net income

198,000

75,000

Dividends declared and paid

60,000

10,000

Required - How much of the consolidated net income for 2010 is attributable to the controlling interest?

Reference no: EM133138653

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