Assume that AAA Co. plans to acquire XYZ Co. As its subsidiary on April 30, 2022. Below are the statements of financial position of the two companies before the acquisition is made: AAA Co. and XYZ Co. Statement of financial position April 30, 2022. AAA Co. XYZ Co. Assets Current Assets Cash 725,300 250,125 Trade Receivables 1,200, 100 650,375 Inventory Prepayments 850,500 711,000 15,000 120,000 2,895,900 Total Current Assets 1,626,500 Non-current Assets Equipment (net) 1,950,000 639,250 210,000 2,160,000 Other Assets 150,000 Total Non-current Assets 789,250 Total Assets 5,055,900 2,415,750 Liabilities and Equity Liabilities Current Liabilities Trade Payables 911,000 305,620 250,000 1,161,000 Loan Payable -current portion Total Current Liabilities 305,620 Non-Current Liability Loan Payable -non-current portion 750,000 Total Non-current Liabilities 750,000 Total Liabilities 1,911,000 305,620 Equity Common Stock 2,000,000 1,500,000 Additional Paid-in Capital Retained Earnings Total Equity 800,000 450,000 344,900 160,130 3,144,900 2,110,130 Total Liabilities and Equity 5,055,900 2,415,750
Assume that AAA Co. plans to acquire XYZ Co. As its subsidiary on April 30, 2022. Below are the statements of financial position of the two companies before the acquisition is made: AAA Co. and XYZ Co. Statement of financial position April 30, 2022. AAA Co. XYZ Co. Assets Current Assets Cash 725,300 250,125 Trade Receivables 1,200, 100 650,375 Inventory Prepayments 850,500 711,000 15,000 120,000 2,895,900 Total Current Assets 1,626,500 Non-current Assets Equipment (net) 1,950,000 639,250 210,000 2,160,000 Other Assets 150,000 Total Non-current Assets 789,250 Total Assets 5,055,900 2,415,750 Liabilities and Equity Liabilities Current Liabilities Trade Payables 911,000 305,620 250,000 1,161,000 Loan Payable -current portion Total Current Liabilities 305,620 Non-Current Liability Loan Payable -non-current portion 750,000 Total Non-current Liabilities 750,000 Total Liabilities 1,911,000 305,620 Equity Common Stock 2,000,000 1,500,000 Additional Paid-in Capital Retained Earnings Total Equity 800,000 450,000 344,900 160,130 3,144,900 2,110,130 Total Liabilities and Equity 5,055,900 2,415,750
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 30E
Related questions
Question
100%
Make journal entries for the parent company. For the amount of consideration given, you have to calculate it if 100% interest was acquired, then it is at book value.
![3
Assume that AAA Co. plans to acquire XYZ Co. As its subsidiary on April 30, 2022.
Below are the statements of financial position of the two companies before the acquisition is made:
4
AAA Co. and XYZ Co.
Statement of financial position
April 30, 2022.
7
8
9
10
AAА Со.
XYZ Co.
11
Assets
12
Current Assets
13
Cash
725,300
250,125
14
Trade Receivables
1,200,100
650,375
15
Inventory
Prepayments
850,500
711,000
15,000
1,626,500
16
120,000
17
Total Curret Assets
2,895,900
18
Non-current Assets
19
Equipment (net)
1,950,000
639,250
20
Other Assets
210,000
2,160,000
150,000
21
Total Non-current Assets
789,250
23
Total Assets
5,055,900
2,415,750
24
25
Liabilities and Equity
26
Liabilities
27
Current Liabilities
28
Trade Payables
911,000
305,620
Loan Payable - current portion
250,000
1,161,000
29
30
Total Current Liabilities
305,620
31
Non-Current Liability
32
Loan Payable -non-current portion
750,000
33
Total Non-current Liabilities
750,000
35
Total Liabilities
1,911,000
305,620
36
Equity
37
38
Common Stock
2,000,000
1,500,000
Additional Paid-in Capital
Retained Earnings
Total Equity
39
800,000
450,000
160,130
2,110,130
40
344,900
41
3,144,900
Total Liabilities and Equity
5,055,900
2,415,750
43
44](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F650b3580-c08b-4b86-aba0-98b7d9671e56%2Fcf587aab-74d3-46e8-93de-3f20945b90c5%2F3c4qkq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:3
Assume that AAA Co. plans to acquire XYZ Co. As its subsidiary on April 30, 2022.
Below are the statements of financial position of the two companies before the acquisition is made:
4
AAA Co. and XYZ Co.
Statement of financial position
April 30, 2022.
7
8
9
10
AAА Со.
XYZ Co.
11
Assets
12
Current Assets
13
Cash
725,300
250,125
14
Trade Receivables
1,200,100
650,375
15
Inventory
Prepayments
850,500
711,000
15,000
1,626,500
16
120,000
17
Total Curret Assets
2,895,900
18
Non-current Assets
19
Equipment (net)
1,950,000
639,250
20
Other Assets
210,000
2,160,000
150,000
21
Total Non-current Assets
789,250
23
Total Assets
5,055,900
2,415,750
24
25
Liabilities and Equity
26
Liabilities
27
Current Liabilities
28
Trade Payables
911,000
305,620
Loan Payable - current portion
250,000
1,161,000
29
30
Total Current Liabilities
305,620
31
Non-Current Liability
32
Loan Payable -non-current portion
750,000
33
Total Non-current Liabilities
750,000
35
Total Liabilities
1,911,000
305,620
36
Equity
37
38
Common Stock
2,000,000
1,500,000
Additional Paid-in Capital
Retained Earnings
Total Equity
39
800,000
450,000
160,130
2,110,130
40
344,900
41
3,144,900
Total Liabilities and Equity
5,055,900
2,415,750
43
44
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