11. Parent and Sub Inc had the followingbalance sheets on December 31, 2021 (seeimage below). On January 1, 2022 Parentpurchased all of Sub Inc's Common Shares forP40,000 in cash. On that date, Sub's CurrentAssets and Fixed Assets were worth P26,000and P54,000, respectively. Assuming thatConsolidated Financial Statements wereprepared on that date, the Current Assets ofthe combined entity should be valued at howmuch?Curent AssetsFixed Assets (net)Total AssetsCurent LiabilitiesBonds PayableCommon SharesRetained EarningsTotal Liabilities and EquityParentP 60,000100,000P160.000P 42,00020,00090,0008,000P160.000SubP10,00060,000P70.000P35,00012,00012,00011,000P70.000Your answer12. Using the same information in #11,Assuming that Consolidated FinancialStatements were prepared on that date, theGoodwill of the combined entity should bevalued at how much? *Your answer

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11. Parent and Sub Inc had the following balance sheets on December 31, 2021 (see image below). On January 1, 2022 Parent purchased all of Sub Inc's Common Shares for P40,000 in cash. On that date, Sub's Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, the Current Assets of the combined entity should be valued at how much? * Current Assets Fixed Assets (net) Total Assets Current Liabilities Bonds Payable Common Shares Retained Earnings Total Liabilities and Equity Parent P 60,000 100,000 P160.000 P 42,000 20,000 90,000 8,000 P160.000 Sub P10,000 60,000 P70.000 P35,000 12,000 12,000 11,000 P70.000 Your answer

11. Parent and Sub Inc had the following balance sheets on December 31, 2021 (see image below). On January 1, 2022 Parent purchased all of Sub Inc's Common Shares for P40,000 in cash. On that date, Sub's Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, the Current Assets of the combined entity should be valued at how much? * Current Assets Fixed Assets (net) Total Assets Current Liabilities Bonds Payable Common Shares Retained Earnings Total Liabilities and Equity Parent P 60,000 100,000 P160.000 P 42,000 20,000 90,000 8,000 P160.000 Sub P10,000 60,000 P70.000 P35,000 12,000 12,000 11,000 P70.000 Your answer

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 2MC: During 2021, Anthony Company purchased debt securities as a long-term investment and classified them...

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11. Parent and Sub Inc had the following balance sheets on December 31, 2021 (see image below). On January 1, 2022 Parent purchased all of Sub Inc’s Common Shares for P40,000 in cash. On that date, Sub’s Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, the Current Assets of the combined entity should be valued at how much?
11. Parent and Sub Inc had the following balance sheets on December 31, 2021 (see image below). On January 1, 2022 Parent purchased all of Sub Inc’s Common Shares for P40,000 in cash. On that date, Sub’s Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, the Current Assets of the combined entity should be valued at how much? 12. Using the same information in #11, Assuming that Consolidated Financial Statements were prepared on that date, the Goodwill of the combined entity should be valued at how much?
6. ABC and XYZ Inc had the following balance sheets on December 31, 2021: (see image below) On January 1, 2022 ABC purchased all of XYZ Inc’s Common Shares for P40,000 in cash. On that date, XYZ’s Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, determine the value of the current assets of the combined entity: 7. Using the same information in #6 how much is the Goodwill arising from this Business Combination? 8. Using the same information in #6 how much is the Shareholder’s Equity section of the Consolidated Balance Sheet?
6. ABC and XYZ Inc had the following balance sheets on December 31, 2021: (see image below) On January 1, 2022 ABC purchased all of XYZ Inc's Common Shares for P40,000 in cash. On that date, XYZ's Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, determine the value of the current assets of the combined entity: * ABC P 60,000 100,000 P160.000 P 42,000 20,000 90,000 8,000 P160.000 XYZ P10,000 60,000 P70.000 P35,000 12,000 12,000 11,000 P70.000 Curent Assets Fixed Assets (net) Total Assets Current Liabilities Bonds Payable Common Shares Retained Earnings Total Liabilities and Equity
ABC and XYZ Inc had the following balance sheets on December 31, 2021: (see image below) On January 1, 2022 ABC purchased all of XYZ Inc’s Common Shares for P40,000 in cash. On that date, XYZ’s Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, 1) Determine the value of the current assets of the combined entity? 2) how much is the Goodwill arising from this Business Combination? 3) how much is the Shareholder’s Equity section of the Consolidated Balance Sheet?
6. ABC and XYZ Inc had the following balance sheets on December 31, 2021: (see image below) On January 1, 2022 ABC purchased all of XYZ Inc’s Common Shares for P40,000 in cash. On that date, XYZ’s Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, determine the value of the current assets of the combined entity: *
On 1 July 2021, King Ltd acquired all the share capital of Queen Ltd for $1,800,000, and on that date Queen Ltd.'s equity were as follows: Share capital $1,200,000; Revaluation surplus $500,000 and Retained earnings $200,000. All the assets and liabilities of Queen Ltd. were recorded at fair value on 1 July 2021. During the financial year 2022, the following intragroup transactions occurred between King Ltd and Queen Ltd: Queen Ltd sold land to King Ltd for $400,000, which was $100,000 above cost. The land was still hold by King Ltd. King Ltd sold an equipment to Queen Ltd for $400,000. The carrying amount of equipment to King Ltd of $320,000. Both entities depreciate equipment at a rate of 10% p.a. on cost. Queen Ltd sold inventories costing $160,000 to King Ltd for $180,000. 1/4th of the inventories were still on hand with King Ltd. King Ltd received $15,000 of service revenue from Queen Ltd. Queen Ltd paid dividend of $30,000 and interest on loan of $8,000 to King Ltd. The tax rate…
10. On January 2, 2021, X Co. acquired all the ordinary share of Y Co. for P2,060,000. On that date, Y Co. reported the following stockholders’ equity account balances: Ordinary share P800,000, Share premium P620,000, accumulated profits P300,000. The assets and liabilities of Y Co had book values that were approximately equal to its fair values, except building that was undervalued by P400,000, and equipment that was overvalued by P120,000. The building that was undervalued has an estimated life of 20 years and the equipment with 5 years useful life. Prior to acquisition, Y Co. has unimpaired goodwill in the amount of P10,000. What is the amount of goodwill to be reported in the consolidated Statement of Financial Position?
Below are Lebnas Corp.’s 2019 income statement and comparative balance sheet at 12/31/2019 and 12/31/2018. Additional information: On December 31, 2018, Lebnas acquired 25% of Island ’s common stock for $609,000. On that date, the carrying value of Island’s assets and liabilities, which approximated their fair values, was $2,435,000. Island reported income of $319,000 for the year ended December 31, 2019. No dividend income was received by Lebnas on Island’s common stock during the year 2019. During 2018, Lebnas loaned $797,500 to POI , an unrelated company. POI made the first semi-annual principal repayment of $72,500, plus interest at 10%, on December 31, 2018. POI is current on the loan as of December 31, 2019. On January 2, 2019, Lebnas sold equipment costing $145,000, with a carrying amount of $44,950 for cash. On December 31, 2019, Lebnas entered into a finance lease for a new The present value of the annual rental…
On January 1, 2025, Sandhill Inc. had the following balance sheet. Sandhill Inc. Balance Sheet As of January 1, 2025 Assets Equity Cash $54,200 Common stock $260,800 Debt investments (available-for-sale) Total 220,700 Accumulated other comprehensive income 14,100 $274,900 Total $274,900 The accumulated other comprehensive income related to unrealized holding gains on available-for-sale debt securities. The fair value of Sandhill Inc.'s available-for-sale debt securities at December 31, 2025, was $185,300; its cost was $127,000. No securities were purchased during the year. Sandhill Inc's income statement for 2025 was as follows. (Ignore income taxes.) Sandhill Inc. Income Statement As of January 1, 2025 Dividend revenue $5,300 Gain on sale of investments 27,300 Net income $32,600 Prepare the journal entry to record the sale of the available-for-sale debt securities in 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is…
Parent and Sub Inc had the following balance sheets on December 31, 2021 (see image below). On January 1, 2022 Parent purchased all of Sub Inc’s Common Shares for P40,000 in cash. On that date, Sub’s Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, the Current Assets of the combined entity should be valued at how much? Assuming that Consolidated Financial Statements were prepared on that date, the Goodwill of the combined entity should be valued at how much?
Taylor Company acquired the assets and assumed the liabilities of Swift Inc. on June 30, 2022. The consideration transferred by the acquirer were as follows: Cash amounting to P2,000,000. Issued 10,000 ordinary shares at P10 par with a market price of Issued 5 year interest bearing bonds payable with a face value of P3,000,000 with a nominal rate of 10% and effective interest of 12%. (use two decimal places for the present value factor) Acquisition related costs incurred were as follows: Legal fees amounting to P120,000, 70% of which is not yet Share issue costs paid amounted to P15,000. Bond Issue costs paid amounting to P120,000. The Balance Sheet of the two entities before acquisition were as follows: Taylor Company Swift Inc. Total Assets 16,500,000 5,235,000 Total Liabilities 2,500,000 500,000 Ordinary Shares 5,000,000 1,250,000 Share premium 1,500,000 750,000 Retained Earnings 6/30/22 7,500,000 2,735,000 It was…