LGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by paying cash. Theconsolidated statement of financial position showed the following balances at the date of acquisition.Consolidated BalancesTotal AssetsTotal LiabilitiesAmount15,670,0004,575,000Total Shareholder'sEquityThe book value of the net assets of NS Services Center is P4,500,000. The assets of NS ServiceCenter are fairly valued except for the following:• Patent on the product that is deemed worthless, P50,000.• Goodwill of P150,000.• Unrecognized identifiable R&D of P75,000.The fair value of the non-controlling interest is 705,000 and the book value of LGM's equitybalance is P9,500,.000.On December 31, 2022 the following information were provided by NS Services Center:• Net income of 400,000 was recognized.• Patents remaining useful life is 4 years.• Pre-existing goodwill presented above was impaired with a current value of 120,000.• Dividends were declared amounting to P100,000.LGM Motors recognized net income amounting to P650,000 on December 31, 2022.3. How much is the Consolidated Shareholder's Equity on December 31, 2022?a. 12,085,000c. 12,107,500d. 12,087,500b. 12,105,000

Name: LGM Motors acquired 80% of NS Service Center outstanding shares on Ja
Uploaded: 2024-03-04T10:43:15.000Z
Channel: Bartleby
Description: LGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by paying cash. Theconsolidated statement of financial position showed the following balances at the date of acquisition.Consolidated BalancesTotal AssetsTotal Liabil

Answered: LGM Motors acquired 80% of NS Service…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Topic Video

Question

LGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by paying cash. The
consolidated statement of financial position showed the following balances at the date of acquisition.
Consolidated Balances
Total Assets
Total Liabilities
Amount
15,670,000
4,575,000
Total Shareholder's
Equity
The book value of the net assets of NS Services Center is P4,500,000. The assets of NS Service
Center are fairly valued except for the following:
• Patent on the product that is deemed worthless, P50,000.
• Goodwill of P150,000.
• Unrecognized identifiable R&D of P75,000.
The fair value of the non-controlling interest is 705,000 and the book value of LGM's equity
balance is P9,500,.000.
On December 31, 2022 the following information were provided by NS Services Center:
• Net income of 400,000 was recognized.
• Patents remaining useful life is 4 years.
• Pre-existing goodwill presented above was impaired with a current value of 120,000.
• Dividends were declared amounting to P100,000.
LGM Motors recognized net income amounting to P650,000 on December 31, 2022.
3. How much is the Consolidated Shareholder's Equity on December 31, 2022?
a. 12,085,000
c. 12,107,500
d. 12,087,500
b. 12,105,000

Expert Solution

Step 1

INTRODUCTION

Consolidated Shareholders' Equity is defined as the entire assets of the business and its Consolidated Subsidiary left after deducting the Company's obligations and its Consolidated Liabilities.

It is a financial statement included in a company's balance sheet that informs shareholders of the circumstances that accounts have modified.

Consolidated Equity refers to the entire shareholders' equity of the Corporation and its subsidiaries on a consolidated basis as of the date of any assessment therefor, everything as computed in accordance with GAAP.

Equity held by shareholders refers to the sum that a founder of the company have contributed to the firm.

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions