ABC Company acquires 80% of DEF's outstanding stock on January 1, 2021 by paying P300,000 cash and immediately prepares a consolidated balance sheet. ABC also pays P12,000 in accounting and legal fees to accomplish the purchase. The separate balance sheets of the two companies immediately prepared before the consolidation with acquiree's fair value were presented as follows: ABC, Carrying value Cash Accounts Receivable Inventory Land DEF, Carrying value 50,000 50,000 60,000 DEF, Fair value 50,000 50,000 350,000 75,000 100,000 175,000 400,000 100,000 200,000 500,000 50,000 250,000 40,000 300,000 100,000 100,000 200,000 20,000 75,000 100,000 290,000 100,000 135,000 Building and Equipment, net Accounts Payable Bonds Payable Common stock, P10 par Share Premium Retained Earnings 80,000

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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ABC Company acquires 80% of DEF's outstanding stock on January 1, 2021 by paying P300,000 cash and immediately
prepares a consolidated balance sheet. ABC also pays P12,000 in accounting and legal fees to accomplish the
purchase. The separate balance sheets of the two companies immediately prepared before the consolidation with
acquiree's fair value were presented as follows:
ABC, Carrying value
350,000
DEF, Carrying value
50,000
DEF, Fair value
50,000
50,000
75,000
Cash
Accounts Receivable
75,000
100,000
175,000
400,000
100,000
200,000
500,000
50,000
250,000
50,000
60,000
Inventory
Land
Building and Equipment, net
Accounts Payable
Bonds Payable
Common stock, P10 par
Share Premium
Retained Earnings
40,000
300,000
100,000
100,000
200,000
20,000
80,000
100,000
290,000
100,000
135,000
Compute for the Consolidated Total Asset.
Transcribed Image Text:ABC Company acquires 80% of DEF's outstanding stock on January 1, 2021 by paying P300,000 cash and immediately prepares a consolidated balance sheet. ABC also pays P12,000 in accounting and legal fees to accomplish the purchase. The separate balance sheets of the two companies immediately prepared before the consolidation with acquiree's fair value were presented as follows: ABC, Carrying value 350,000 DEF, Carrying value 50,000 DEF, Fair value 50,000 50,000 75,000 Cash Accounts Receivable 75,000 100,000 175,000 400,000 100,000 200,000 500,000 50,000 250,000 50,000 60,000 Inventory Land Building and Equipment, net Accounts Payable Bonds Payable Common stock, P10 par Share Premium Retained Earnings 40,000 300,000 100,000 100,000 200,000 20,000 80,000 100,000 290,000 100,000 135,000 Compute for the Consolidated Total Asset.
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