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Compute for consolidated total asset on December 31, 2021

Compute for consolidated total asset on December 31, 2021

FINANCIAL ACCOUNTING
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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Compute for consolidated total asset on December 31, 2021 On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P60 per share and par value of P40 per share. XYZ's shareholders' equity as of January 1, 2021 comprises the following: 292,000 Total Nabilities 120,000 680,000 Share capital Share premium Retained 200,000 (at carrying amounts) 260,000 Share capital Retained earnings Total equity 200,000 440,000 176,000 96,000 296,000 earnings 1,380,000 Total equity 376,000 On January 1, 2021, the fair values of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows: Carrying amounts TOTAL LIABILITIES 1,672,000 496,000 Fair value Increment AND FQUITY XYZ, Inc. Fair values Cash 20,000 20,000 Statements of profit or loss For the year ended December 31, 2021 Accounts receivable 48,000 48,000 Inventory 92,000 124,000 32,000 ABC Co. XYZ, Inc. 480,000 200,000 240,000 40,000 Equipment Accumulated depreciation Sales 1,200,000 Cost of goods sold Gross profit (660,000) (288,000) 192,000 (40,000) (40,000) (48,000) (8,000) 540,000 Accounts payable (24,000) (24,000) Depreciation expense (160,000) 64,000 (128,000) (12,000) Net assets 296,000 360,000 Distribution costs (72,000) Interest expense Profit for the year The remaining useful life of the equipment is 4 years. During 2021, no dividends were declared by either ABC or XYZ. There were also no inter-company transactions. The group determined that goodwill is impaired by P4,000. ABC's and XYZ's individual financial statements at year-end are shown below: Statements of financial position As at December 31, 2021 240,000 80,000 On acquisition date, ABC Co. elected to measure non-controlling interest as its proportionate share in XYZ, Inc.'s net identifiable assets. ABC Co. XYZ, Inc. ASSETS Cash 92,000 228,000 Accounts 300,000 88,000 receivable 420,000 60,000 Inventory Investment in subsidiary Equipment 300,000 s00,000 200,000 Accumulated (240,000) (80,000) depreciation TOTAL ASSETS 1,672.000 496.000
Transcribed Image Text:Compute for consolidated total asset on December 31, 2021 On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P60 per share and par value of P40 per share. XYZ's shareholders' equity as of January 1, 2021 comprises the following: 292,000 Total Nabilities 120,000 680,000 Share capital Share premium Retained 200,000 (at carrying amounts) 260,000 Share capital Retained earnings Total equity 200,000 440,000 176,000 96,000 296,000 earnings 1,380,000 Total equity 376,000 On January 1, 2021, the fair values of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows: Carrying amounts TOTAL LIABILITIES 1,672,000 496,000 Fair value Increment AND FQUITY XYZ, Inc. Fair values Cash 20,000 20,000 Statements of profit or loss For the year ended December 31, 2021 Accounts receivable 48,000 48,000 Inventory 92,000 124,000 32,000 ABC Co. XYZ, Inc. 480,000 200,000 240,000 40,000 Equipment Accumulated depreciation Sales 1,200,000 Cost of goods sold Gross profit (660,000) (288,000) 192,000 (40,000) (40,000) (48,000) (8,000) 540,000 Accounts payable (24,000) (24,000) Depreciation expense (160,000) 64,000 (128,000) (12,000) Net assets 296,000 360,000 Distribution costs (72,000) Interest expense Profit for the year The remaining useful life of the equipment is 4 years. During 2021, no dividends were declared by either ABC or XYZ. There were also no inter-company transactions. The group determined that goodwill is impaired by P4,000. ABC's and XYZ's individual financial statements at year-end are shown below: Statements of financial position As at December 31, 2021 240,000 80,000 On acquisition date, ABC Co. elected to measure non-controlling interest as its proportionate share in XYZ, Inc.'s net identifiable assets. ABC Co. XYZ, Inc. ASSETS Cash 92,000 228,000 Accounts 300,000 88,000 receivable 420,000 60,000 Inventory Investment in subsidiary Equipment 300,000 s00,000 200,000 Accumulated (240,000) (80,000) depreciation TOTAL ASSETS 1,672.000 496.000
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