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What is the consolidated net income

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On January 1, 2020, Betty Corp. (qualifies as SME) paid cash of P600,000 for all the outstanding shares of Lyndon Company. The carrying value of the assets and liabilities of Lyndon on January 1, 2020 follow:

Accounts receivable- 90,000
Inventory- 180,000
Plant and Equipment (net of Accumulated depreciation of 220,000)- 320,000
Goodwill- 100,000
Liabilities- 120,000

On January 1, 2020 Lyndoninventory had a fair value of P150,000 and plant & equipment (net) had a fair value of P380,000. Cost of arranging the combination are as follows: legal fees for combination, P30,000; finder's fee, P50,000; other miscellaneous direct costs, P20,000. Net income of Betty and Lyndon for 2020 amounts to P158,000 and P60,000, respectively. Betty received dividend of P18,000 from Lyndon during 2020. The PPE has original useful life of 10 years and was already held for 4 years as of date of acquisition.

Problem 1: On December 31, 2020, what is the consolidated net income?

a. 200,000
b. 210,000
c. 202,000
d. 220,000

Reference no: EM132944912

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