Requirements:10. How much is the consolidated liabilities on December 31, 2x19?11. How much is the consolidated stockholder’s equity on December 31, 2x19? CONSOLIDATED WORKSHEETDECEMBER 31, 20X9SubsidiaryCompany Company550,000INCOMEANDRETAINEDParentCONSOLIDATEDEARNINGSDebitsCreditsBALANCESSales800,000Dividend incomeCost of sales40,000(480,000) (250,000)(60,000) (150,000)300,000Operating expensesNet income150,000Retained earnings, Jan 1, 20x19Dividends declared500,000(100,000)700,000100,000(50,000)200,000Retained earnings endBALANCE SHEETCash300,000100,000650,000350,000900,000125,00030,00045,000ReceivablesInventoryInvestment in SubsidiaryPPE350,000Total2,300,000550,000LiabilitiesOutstanding sharesRetained earnings600,0001,000,000700,000150,000200,000200,000Total2,300,000550,000 On January 5, 20x9, Parent Company acquired 80% of the outstanding shares of Subsidiary Company for P350,000.The financial statements of Parent and Subsidiary Company before the acquisition follow:Subsidiary ParentValueParentCompany Company700,000100,000 100,00055,000365,000Cash300,0001,000,000500,0001,000,000Inventory50,000350,000200,000 200,000200,000100,000PPELiabilitiesOtstanding SharesRetained earnings500,000Financial statements for Parent and Subsidiary for the year ended December 31, 2x19 follow:INCOME AND RETAINED EARNINGSParentSubsidiaryCompany Company800,00040,000(480,000) (250,000)(60,000)300,000500,000(100,000)700,000Sales550,000Dividend incomeCost of salesOperating expensesNet income(150,000)150,000Retained earnings, Jan 1, 2019Dividends declared100,000(50,000)200,000Retained earnings endBALANCE SHEETCash300,000100,000650,000350,000900.000125,00030,00045,000ReceivablesInventoryInvestment in SubsidiaryPPE350,000Total2,300,000550,000Liabilities600,0001,000,000700,0002,300,000150,000200,000200.000550,000Outstanding sharesRetained earningsTotalAdditional Information:The undervalued PPE of Subsidiary on the date of acquisition has a remaining useful life of 5-years.Subsidiary Company owes Parent Company P5,000 on December 31, 2x19.1.2.

The problem related to consolidation. The patent company acquired 80% stake in subsidiary company on…

Answered: Requirements: 10. How much is the…

Requirements: 10. How much is the consolidated liabilities on December 31, 2x19? 11. How much is the consolidated stockholder’s equity on December 31, 2x19

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares each valued at $1.50. The summary statement of the financial position of the subsidiary company immediately following the acquisition is: Fair value of assets acquired. $2,640,000Fair value of liabilities acquired. $720,000Total shareholders’ equity of the subsidiary company $800,000Retained earnings of the subsidiary company $1,120,000 (d) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchase consideration paid was $1,000,000 cash and 400,000 shares each valued at $1.50
The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares eachvalued at $1.50. The summary statement of the financial position of the subsidiary company immediatelyfollowing the acquisition is:Fair value of assets acquired $2,640,000Fair value of liabilities acquired $720,000Total shareholders’ equity of the subsidiary company $800,000Retained earnings of the subsidiary company $1,120,000Required:(b) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition (c) Pass the necessary consolidation entry to eliminate the subsidiary by the parent company (d) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchase consideration paid was $1,000,000 cash and 400,000 shares each valued at $1.50.
The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares eachvalued at $1.50. The summary statement of the financial position of the subsidiary company immediatelyfollowing the acquisition is:Fair value of assets acquired $2,640,000Fair value of liabilities acquired $720,000Total shareholders’ equity of the subsidiary company $800,000Retained earnings of the subsidiary company $1,120,000Required:(d) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchaseconsideration paid was $1,000,000 cash and 400,000 shares each valued at $1.50
The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares eachvalued at $1.50. The summary statement of the financial position of the subsidiary company immediatelyfollowing the acquisition is:Fair value of assets acquired $2,640,000Fair value of liabilities acquired $720,000Total shareholders’ equity of the subsidiary company $800,000Retained earnings of the subsidiary company $1,120,000Required:(a) Pass the necessary consolidation entry to eliminate the subsidiary by the parent company (b) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchase consideration paid was $1,000,000 cash and 400,000 shares each valued at $1.50
On January 1, 20x8,Parent Company purchased 80% of the outstanding shares of Subsidiary Company for P800,000. On the date of acquisition, Subsidiary Company reported Ordinary Shares of P800,000 and Retained Earnings of P200,000. Subsidiary’s Inventory was understated by P20,000; Equipment with a 5-year life was understated by P20,000, Building with an 8-year life was understated by P80,000 and land was understated by P40,000. The non-controlling interest is to be stated at fair value and the fair value of the non-controlling interest on January 1, 20x8 is P210,000. The following are taken from the books of Parent and Subsidiary for 20x8. 1) From the given data, determine the total assets as of December 31, 20x1. 2) From the given data, assuming the retained earning of Subsidiary on December 31, 20x11 is P350,000, determine the non-controlling interest to be reported in the consolidated financial statements on December 31, 20x11 assuming no changes to Subsidiary company’s ordinary…
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On January 1, 20x8, Parent Company purchased 80% of the outstanding shares of Subsidiary Company for P800,000. On the date of acquisition, Subsidiary Company reported Ordinary Shares of P800,000 and Retained Earnings of P200,000. Subsidiary’s Inventory was understated by P20,000; Equipment with a 5-year life was understated by P20,000, Building with an 8-year life was understated by P80,000 and land was understated by P40,000. The non-controlling interest is to be stated at fair value and the fair value of the non-controlling interest on January 1, 20x8 is P210,000. During the year, Parent sold goods to Subsidiary for P150,000 at a 25% mark-up and in turn purchased P200,000 of Subsidiary’s goods which Subsidiary sold at a 20% mark-up. From the goods purchased, P50,000 remain in Parent’s books at the end of the year, while P20,000 remain in Subsidiary’s books at the end of the year. 30% of the undervalued inventory of Subsidiary still remain unsold by the end of 20x8. The following are…