4. What is the amount of pre-acquisition earnings on the acquisition date consolidated income statement if the parent acquires 90 percent of the subsidiary's stock and the following income statement accounts exist at the acquisition date? Parent Subsidiary Sales P250,000 P60,000 Cost of Goods Sold 120,000 12,000 Depreciation Expense 10,000 5,000 Operating Expenses 40,000 8,000 Income Tax Expense 32,000 14,000 5. Using the same information in No. 4, what is the imputed value of a subsidiary if the parent pays P56.000 for 80 percent of the subsidiary's stock?
4. What is the amount of pre-acquisition earnings on the acquisition date consolidated income statement if the parent acquires 90 percent of the subsidiary's stock and the following income statement accounts exist at the acquisition date? Parent Subsidiary Sales P250,000 P60,000 Cost of Goods Sold 120,000 12,000 Depreciation Expense 10,000 5,000 Operating Expenses 40,000 8,000 Income Tax Expense 32,000 14,000 5. Using the same information in No. 4, what is the imputed value of a subsidiary if the parent pays P56.000 for 80 percent of the subsidiary's stock?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 98.3C
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