1. Winston Corporation purchases all of Harley Company’s stock on June 1 for P1,200,000. At that date, Harley had the following book and market values: Book Value Market Value Cash and Receivables P80,000 P80,000 Inventory 230,000 270,000 Plant Assets (net) 900,000 1,230,000 Cost of Goods Sold 750,000 Operating Expenses 170,000 Dividends 20,000 Liabilities 600,000 600,000 Common Stock 25,000 Retained Earnings 525,000 Sales 1,000,000 What amount of retained earnings is eliminated in the acquisition date worksheet elimination? Please explain step by step with conclusion. Thank You
1. Winston Corporation purchases all of Harley Company’s stock on June 1 for P1,200,000. At that date, Harley had the following book and market values:
Book Value Market Value
Cash and Receivables P80,000 P80,000
Inventory 230,000 270,000
Plant Assets (net) 900,000 1,230,000
Cost of Goods Sold 750,000
Operating Expenses 170,000
Dividends 20,000
Liabilities 600,000 600,000
Common Stock 25,000
Sales 1,000,000
What amount of retained earnings is eliminated in the acquisition date worksheet elimination?
Please explain step by step with conclusion. Thank You
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