Power Corporation acquired 70 percent of Silk Corporation's common stock on December 31, 20x2. Balance sheet data for the two companies immediately following acquisition follow: Item Power Silk 30,000 45,000 70,000 44,000 Accounts Receivable 110,000 Inventory Land 130,000 Buildings and equipment Less: Accumulated depreciation Investmentin Silk Corporation stock Total Assets 80,000 500,000 (223,000) 150,500 P 791,500 P 405,000 25,000 400,000 (165,000) Accounts payable Тахes payable Bonds payable Common stock Retained eamings Total Liabilities and Stockholders' Equity 61,500 P 28,000 95,000 37,000 200,000 50,000 280,000 150,000 205,000 90,000 P 791,500 P 405,000 After the date of the business combination, the book value of Silk's net assets and liabilities approximated their fair value except for inventory, which had a fair value of P85,000, and land, which had a fair value of P45, 000. The fair value of the non-controlling interest was P64,500 on December 31, 20x2.

Power Corporation acquired 70 percent of Silk Corporation's common stock on December 31, 20x2. Balance sheet data for the two companies immediately following acquisition follow: Item Power Silk 30,000 45,000 70,000 44,000 Accounts Receivable 110,000 Inventory Land 130,000 Buildings and equipment Less: Accumulated depreciation Investmentin Silk Corporation stock Total Assets 80,000 500,000 (223,000) 150,500 P 791,500 P 405,000 25,000 400,000 (165,000) Accounts payable Тахes payable Bonds payable Common stock Retained eamings Total Liabilities and Stockholders' Equity 61,500 P 28,000 95,000 37,000 200,000 50,000 280,000 150,000 205,000 90,000 P 791,500 P 405,000 After the date of the business combination, the book value of Silk's net assets and liabilities approximated their fair value except for inventory, which had a fair value of P85,000, and land, which had a fair value of P45, 000. The fair value of the non-controlling interest was P64,500 on December 31, 20x2.

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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