Balance Sheet for Dex Company and Ed Company on December 31, 2023 are as follows: Dex Company Ed Company Cash P850,000 P75,000 Other Assets 2,200,000 425,000 Total Assets P3,050,000 P500,000 Liabilities P1,200,000 P100,000 Common Stock, P50 par 2,000,000 - Common Stock, P10 par - 250,000 Additional Paid-in Capital 500,000 - Retained Earnings (600,000) 150,000 Total Liabilities and Equity P3,050,000 P500,000 On this date, Dex Company acquired 80% of the stock of Ed Company. Instructions: Prepare a consolidated balance sheet and the eliminating entries as of December 31, 2023, under each set of conditions listed below. Subsidiary stock is acquired in exchange for 5,000 shares of the parent company stock, and the investment accounts is recorded at P300,000, the current market value of the shares issued. The difference between the investment balance an the book value of the interest acquired is regarded as evidence of the overstatement of certain assets of Ed Company and asset accounts are adjusted to bring the book value of subsidiary shares into agreement with the amount paid for the by the parent.
Balance Sheet for Dex Company and Ed Company on December 31, 2023 are as follows: Dex Company Ed Company Cash P850,000 P75,000 Other Assets 2,200,000 425,000 Total Assets P3,050,000 P500,000 Liabilities P1,200,000 P100,000 Common Stock, P50 par 2,000,000 - Common Stock, P10 par - 250,000 Additional Paid-in Capital 500,000 - Retained Earnings (600,000) 150,000 Total Liabilities and Equity P3,050,000 P500,000 On this date, Dex Company acquired 80% of the stock of Ed Company. Instructions: Prepare a consolidated balance sheet and the eliminating entries as of December 31, 2023, under each set of conditions listed below. Subsidiary stock is acquired in exchange for 5,000 shares of the parent company stock, and the investment accounts is recorded at P300,000, the current market value of the shares issued. The difference between the investment balance an the book value of the interest acquired is regarded as evidence of the overstatement of certain assets of Ed Company and asset accounts are adjusted to bring the book value of subsidiary shares into agreement with the amount paid for the by the parent.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
|
Dex Company |
Ed Company |
|
|
Cash |
P850,000 |
P75,000 |
|
Other Assets |
2,200,000 |
425,000 |
|
Total Assets |
P3,050,000 |
P500,000 |
|
Liabilities |
P1,200,000 |
P100,000 |
|
Common Stock, P50 par |
2,000,000 |
- |
|
Common Stock, P10 par |
- |
250,000 |
|
Additional Paid-in Capital |
500,000 |
- |
|
|
(600,000) |
150,000 |
|
Total Liabilities and Equity |
P3,050,000 |
P500,000 |
On this date, Dex Company acquired 80% of the stock of Ed Company.
Instructions: Prepare a consolidated balance sheet and the eliminating entries as of December 31, 2023, under each set of conditions listed below.
- Subsidiary stock is acquired in exchange for 5,000 shares of the parent company stock, and the investment accounts is recorded at P300,000, the current market value of the shares issued. The difference between the investment balance an the book value of the interest acquired is regarded as evidence of the overstatement of certain assets of Ed Company and asset accounts are adjusted to bring the book value of subsidiary shares into agreement with the amount paid for the by the parent.
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