On January 1, year 2, ABC Company exchanged 150,000 shares of its P20 par value common stock for all of XYZ's net assets. Both corporations continued to operate as separate businesses, maintaining accounting records with years ending December 31. ABC uses the equity method to account for its investment in XYZ. Information from separate company operations follows: Retained earnings-12/31/Y1 (ABC) P3,200,00 and (XYZ) P925,000; Net income - six months ended 6/30/Y2 (ABC) P800,000 and (XYZ) P275,000; Dividends paid-3/25/Y2 by ABC was P750,000. What amount of retained earnings would ABC reports in its June 30, year 2 consolidated balance sheet? Your answer

On January 1, year 2, ABC Company exchanged 150,000 shares of its P20 par value common stock for all of XYZ's net assets. Both corporations continued to operate as separate businesses, maintaining accounting records with years ending December 31. ABC uses the equity method to account for its investment in XYZ. Information from separate company operations follows: Retained earnings-12/31/Y1 (ABC) P3,200,00 and (XYZ) P925,000; Net income - six months ended 6/30/Y2 (ABC) P800,000 and (XYZ) P275,000; Dividends paid-3/25/Y2 by ABC was P750,000. What amount of retained earnings would ABC reports in its June 30, year 2 consolidated balance sheet? Your answer

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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In its December 31, year 1 consolidated balance sheet, what amount should ABC report as common stock?
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