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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
Determine the amount of
![On May 1, 20x1, ABC Inc acquired most of the outstanding shares of XYZ Co for cash. The
incomplete working paper elimination entries on that date for the consolidated statement of
financial position of ABC Inc and its subsidiary are shown below:
Stockholders' equity-XYZ
2,437,500
1,584,375
853,125
Investment in XYZ
Non-controlling interest
Inventories
62,500
312,500
61,250
Equipment
Patent
Goodwill
Investment in XYZ
468,750
Non-controlling interest
?
The purchase price of ABC Inc included a control premium of P68,750.](https://content.bartleby.com/qna-images/question/0a682ed1-9c83-4d19-bc3a-8ed5ff7115ef/7cd8280b-a401-43d8-8e94-686837338a07/hadnd_thumbnail.png)
Transcribed Image Text:On May 1, 20x1, ABC Inc acquired most of the outstanding shares of XYZ Co for cash. The
incomplete working paper elimination entries on that date for the consolidated statement of
financial position of ABC Inc and its subsidiary are shown below:
Stockholders' equity-XYZ
2,437,500
1,584,375
853,125
Investment in XYZ
Non-controlling interest
Inventories
62,500
312,500
61,250
Equipment
Patent
Goodwill
Investment in XYZ
468,750
Non-controlling interest
?
The purchase price of ABC Inc included a control premium of P68,750.
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- The meaning of goodwill in accounting is: Multiple Choice The amount by which a company's value exceeds the value of its individual assets and liabilities. Long term assets held as investment. The support of the board of directors for the operating decisions of management. The cost of developing, maintaining, or enhancing the value of a trademark. Rights granted to an entity to deliver a product or service under specified conditions.arrow_forwardThe consolidated balance of fixed assets will be affected by working paper entries involving all of the following, except: A. Excess of fixed asset FV over BV of the parent at the date of acquisition B. Amortization of the excess of fixed asset FV over BV of the subsidiary at the date of acquisition C. Realized gain or loss on intercompany sale of fixed asset D. Unrealized gain or loss on intercompany sale of fixed assetarrow_forwardWhich of the following is/are true regarding goodwill achieved through acquisition as part of business combination? Where the acquirer was able to purchase the business at a discount, the excess of the market capitalization over the consideration transferred will be recognized in profit or loss. The acquirer shall recognize goodwill as of the acquisition date measured as the excess of the aggregate of the consideration transferred over the net of the fair values of all the assets acquired and the liabilities assumed Group of answer choices Both statements are true. None of these statements are true. 2 only. 1 only.arrow_forward
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