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Determine the consolidated expenses to be reported for the year.

Determine the consolidated expenses to be reported for the year.

FINANCIAL ACCOUNTING
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 1, ABC Acquired 60 percent of the outstanding voting stock of XYZ for P301,500 cash consideration. The remaining 40 percent of XYZ had an acquisition date fair value of P138,500. On January 1, XYZ possessed equipment (5-year life) that was undervalued on its books P25,000. XYZ also had developed several secret formulas that ABC assessed at P50,000. Theses formulas, although not recorded on XYZ's financial records, were estimated to have a 20-year future life. ABC also determined that the inventory of XYZ is overvalued by P10,000. 80% of these inventories remain unsold by the end of the year. As of December 31, the financial statements appeared as follows: АВС XYZ P (300, 000) P (200, 000) Revenues (from sales and dividends) Cost of goods sold Expenses 140, 000 20, 000 P (140, 000) 80, 000 10, 000 P (110, 000) Net Income Retained eamings 1/1 Net Income Dividends paid Retained eamings 12/31 P (300, 000) (140, 000) -0- P (150, 000) (110, 000) 10,000 || P (250, 000) P (440, 000) P 210, 000 150, 000 301,500 398,500 P 1,060, 000 Р90, 000 110, 000 Cash and Receivables Inventory Investment in SS Equipment (net) Total Assets -0- 300, 000 P500, 000 P (420, 000) (200, 000) (440, 000) P (1,060,000) P (150, 000) (100, 000) (250, 000) P (500, 000) Liabilities Common stock Retained earmings 12/31 Total Liabilities and Equities Determine the consolidated expenses to be reported for the year. Your answer
Transcribed Image Text:On January 1, ABC Acquired 60 percent of the outstanding voting stock of XYZ for P301,500 cash consideration. The remaining 40 percent of XYZ had an acquisition date fair value of P138,500. On January 1, XYZ possessed equipment (5-year life) that was undervalued on its books P25,000. XYZ also had developed several secret formulas that ABC assessed at P50,000. Theses formulas, although not recorded on XYZ's financial records, were estimated to have a 20-year future life. ABC also determined that the inventory of XYZ is overvalued by P10,000. 80% of these inventories remain unsold by the end of the year. As of December 31, the financial statements appeared as follows: АВС XYZ P (300, 000) P (200, 000) Revenues (from sales and dividends) Cost of goods sold Expenses 140, 000 20, 000 P (140, 000) 80, 000 10, 000 P (110, 000) Net Income Retained eamings 1/1 Net Income Dividends paid Retained eamings 12/31 P (300, 000) (140, 000) -0- P (150, 000) (110, 000) 10,000 || P (250, 000) P (440, 000) P 210, 000 150, 000 301,500 398,500 P 1,060, 000 Р90, 000 110, 000 Cash and Receivables Inventory Investment in SS Equipment (net) Total Assets -0- 300, 000 P500, 000 P (420, 000) (200, 000) (440, 000) P (1,060,000) P (150, 000) (100, 000) (250, 000) P (500, 000) Liabilities Common stock Retained earmings 12/31 Total Liabilities and Equities Determine the consolidated expenses to be reported for the year. Your answer
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