Transcribed Image Text: Pentagon Company acquires 80% of Square Company for P500,000 on January 1, 2012. On that date, Square’s com stock and retained earnings amounted to P200,000. Inventory was

Transcribed Image Text: Pentagon Company acquires 80% of Square Company for P500,000 on January 1, 2012. On that date, Square’s com
stock and retained earnings amounted to P200,000. Inventory was overvalued by P10,000, equipment (10-year remaining
life) was undervalued by P30,000 and buildings (10-year remaining life) were undervalued by P40,000. Any excess
consideration is attributable to goodwill. From 2012 to 2014, Square earns income and pay dividends as follows:
ommon
2012
2013
2014
Net income P100,000 P120,000 P130,000
Dividends 40,000 50,000 60,000
amount is the non-controlling interest in net income of Square for the year ended December 31, 2012?
A. P12,600
B. P20,000
C. P16,600
D. P20,600

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