1. On January 4, 2013, Madeline Co. acquired 80% of the controlling shares of Valiant Co.

for
P1,000,000. The net assets at that time by Valiant were: Oridinary Shares P500,000, Share
Premium- P300,000, Retained earnings P200,000. While for Madeline, Ordinary Shares
P3,000,000, Retained earnings, P2,000,000. The fair value of Valiants equipment, with a
remaining life of 5 years were understated by P100,000, while its inventory is overstated by
P20,000. NCI was measured as a proportionate share of the fair value of net assets of
Valiant. During the year, Madeline sold an equipment costing P200,000 with an accumulated
depreciation of P100,000 to Valiant for P150,000. The estimated useful life at the time of
sale was 5 years. Also, Valiant sold an inventory to Madeline costing P80,000 for P100,000.
At the end of the year, Madeline has P40,000 worth of goods in its inventory. Valiant also
sold a land costing P100,000 for P150,000 to Madeline. As of the end of P2013, Madeline still
holds the land on its books. Net Income for 2013 were: Madeline P500,000, Valiant
P200,000, Dividends paid were Madeline: P50,000, Valiant, P20,000. For 2014, Madeline sold
the land for P200,000. Madeline also purchased goods from Valiant billed at P100,000. 75%
of the purchases were sold at the end of 2014. During 2014, Madeline sold goods to Valiant
for P150,000, including a mark-up of 30,000, in turn, Madeline bought P100,000 worth of
goods from Valiant. The mark-up that was used last year was used again in this transaction.
All inventories held by Valiant that was bought from Madeline were sold during 2014. Valiant
also sold the equipment bought from Madeline for a gain of P20,000. Income from separate
operations were: Madeline P300,000, Valiant P200,000. Dividends paid by Valiant
P50,000, Madeline, P60,000. Annual testing of impairment revealed that goodwill must be
reported at its current value of P120,000.
Required:
1. What is the consolidated retained earnings as at December 31, 2014?
2. What is the consolidated net income attributable to parent for 2014?
3. What is the consolidated net income for 2014?