Astris Company acquires an 80% interest in Exile Company for P250,000 in cash on January 1, 2022, when Exile Companyhas the following balance sheet:AssetsLiabilities and EquityCurrent assetsNon-current assetsP100,0002000,000Current liabilitiesP50,000Common stock, P10 par100,000Retained earnings150,000Total assetsP300,000Total liabilities and equityP300,000Any excess of the price paid over the book value is attributable to fixed assets, which have a 10-year remaining life, AstrisCompany uses the cost method to record its investment in Exile Company.The following trail balances of the two companies are prepared on December 31, 2022:Astris Company Exile CompanyCurrent assetsNon-current assetsInvestment in Exile CompanyCurrent liabilitiesP60,000P130,000294,000180,000250,000(60,000)(40,000)Common stock, P10 par(300,000)(100,000)Retained earnings, January 1, 2022(200,000)(150,000)Sales(150,000)(100,000)Expenses110,00075,000Dividend income (from Exile Company)(4,000)Dividends declared5,000Required:Prepare the 2022 consolidated balance sheet.

The objective of the question is to prepare the consolidated balance sheet of Astris Company and…

Answered: Astris Company acquires an 80% interest…

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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On January 31, 2021, Parent Inc. purchased 90% of Sub Inc., issuing common shares of Parent with a market value of $400,000. Costs were $10,000 to issue the shares and $16,000 of other legal costs. Parent and Sub Inc had the following balance sheets on January 30, 2021 immediately prior to the acquisition: Parent Inc. Sub Inc. Sub Inc. (carrying value) (carrying value) (fair value) Cash $1,200,000 $300,000 $300,000 Accounts Receivable $ 400,000 $ 64,000 $ 64,000 Inventory $ 240,000 $ 80,000 $ 60,000 Plant and Equipment (net) $ 960,000 $350,000 $300,000 Accumulated depreciation ($100,000) ($94,000) Trademark $ 20,000 $ 36,000 Total Assets $2,700,000 $720,000 $760,000 Accounts Payable $1,500,000 $300,000 $300,000 Bonds Payable $ 600,000 $240,000 $210,000 $510,000 Common Shares $ 500,000 $ 60,000 Retained Earnings $ 100,000…
CPA corporation purchased a 10% interest in ABC co. on January 1, 2021 as an available for sale investment for a price of P120,000. On January 1, 2022, CPA purchase 7,000 additional shares of ABC from existing stockholders for P945,000. This purchase increased CPA's interest to 70%. ABC had the following statement of financial position just prior to the second purchase. Current Assets 495,000 Building, Net Equipment, Net 420,000 300,000 Liabilities 195,000 Common Stock, P30 par Retained Earnings 300,000 720,000 On the date of second purchase, CPA determines that the equipment was understated by 150,000 and had a remaining life of 5yrs. All other book values approximate their fair values. Any remaining excess is attributed to goodwill. On January 1, 2022 consolidated financial position, what is the amount of goodwill to be reported?
Parent acquires 80% of Sub for $170,000 on December 31, 2014. In 2015 Sub has net income of $140,000 and paid dividends of $70.000. Amortization of excess fair value over book value for the year was $43,750. What is the Investment in Sub account balance as of December 31, 2015.
PAR Inc. Inc. purchased 90% of the outstanding voting shares of SUB Inc. for $90,000 on January 1, 2021. Fair value versus carrying value differences were identified as follows: Jan 1, 2021 SUB Inc. carrying value fair value Cash $5,000 $5,000 Accounts Receivable $30,000 $30,000 Inventory $30,000 $50,000 Equipment (net) $25,000 $20,000 Land $20,000 $30,000 Trademark $10,000 $18,000 Total Assets $120,000 $153,000 Liabilities $70,000 $70,000 Common Shares $30,000 Retained Earnings $20,000 Total Liabilities and Equity $120,000 The equipment had a remaining useful life of 10 years from the date of acquisition. SUB's trademark is estimated to have a remaining life of 5 years from the date of acquisition. ASSUME INSTEAD that PAR has chosen to use the identifiable net assets method to value the non-controlling interest. Calculate at acquisition date: NCI ii) Goodwill
vnt
Huey Company acquires 100% of the stock of Solar Corporation on January 1, 2019, for $2,400,000 cash. As of that date Solar had the following account balances: Book Value Fair value Cash $630,000 $630,000 Accounts receivable 775,000 775,000 Inventory 350,000 400,000 Building-net (10 year life) 1,000,000 900,000 Equipment-net (5 year life) 300,000 400,000 Land 600,000 900,000 Accounts Payable 125,000 125,000 Bonds Payable (Face amount $1,000,000, due 12/31/2023) 2,000,000 2,050,000 Common stock 500,000 Additional paid-in capital 250,000 Retained earnings 780,000 In 2019 and 2020, Solar had net income of $250,000 and $240,000, respectively. In addition, Solar paid dividends of $16,000 in both years. Inventory is assumed to be sold in 2019. Assume straight line amortization/ depreciation for assets and bonds payable. What amount of Solar's Bonds Payable would appear on the consolidated balance sheet at December 31, 2019? Select one: A. $2,050,000 B.$2,040,000 C. $2,000,000 D. $2,010,000

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