How much is the consolidated profit attributable to parent on December 31, 2x19? On January 5, 20x9, Parent Company acquired 80% of the outstanding shares of Subsidiary Company for P350,000. Thefinancial statements of Parent and Subsidiary Company before the acquisition follow:Subsidiary ParentCompany Company Value100,00050,000ParentCash700,000100,00055,000Inventory300,0001,000,000500,0001,000,000500,000365,000200,000PPE350,000200,000200,000100,000LiabilitiesOutstanding SharesRetained eamings Financial statements for Parent and Subsidiary for the year ended December 31, 2x19 follow:INCOME AND RETAINED EARNINGSParentSubsidiaryCompany Company800,00040,000(480,000) (250,000)(60.000)300,000500,000(100,000)Sales550,000Dividend incomeCost of salesOperating expensesNet incomeRetained eamings, Jan 1, 2019Dividends declared(150.000)150,000100,000(50.000)Retained eamings end700,000200,000BALANCE SHEETCash300,000125,000Receivables100,000650,000350,000900.00030,00045,000InventoryInvestmentin SubsidiaryPPE350,000Total2,300,000550,000600,0001,000,000Liabilities150,000200,000OutstandingsharesRetainedeamings700.000200.000Total2,300,000550,000AdditionalInfomation:1.The undervalued PPE of Subsidiary on the date of acquisition has a remaining useful life of 5-years.Subsidiary Company owes Parent Company P5,000 on December 31, 2x19.

The acquisition is a process in which a company acquires the controlling stakes of another company…

Financial statements for Parent and Subsidiary for the year ended December 31, 2x19 follow: INCOME AND RETAINED EARNINGS Parent Company Company 800,000 Subsidiary 550,000 Sales Dividend income Cost of sales 40,000 Operating expenses Net income Retained eamings, Jan 1, 2019 Dividends declared Retained eamings end (480,000) (250,000) (150,000) 150,000 100,000 (50,000) _ 200,000 (60,000) 300,000 500,000 (100,000) 700,000 BALANCE SHEET Cash 300,000 125,000 30,000 45,000 Receivables Inventory Investmentin Subsidiary PPE 100,000 650,000 350,000 900,000 350.000. Total 2,300,000 550,000 Liabilities Outstanding shares Retainedeamings 600,000 150,000 200,000 200.000. 1,000,000 700.000 Total 2,300,000 550,000 AdditionalInfomation: 1. 2. The undervalued PPE of Subsidiary on the date of acquisition has a remaining useful life of 5-years. Subsidiary Company owes Parent Company P5,000 on December 31, 2x19.

Financial statements for Parent and Subsidiary for the year ended December 31, 2x19 follow: INCOME AND RETAINED EARNINGS Parent Company Company 800,000 Subsidiary 550,000 Sales Dividend income Cost of sales 40,000 Operating expenses Net income Retained eamings, Jan 1, 2019 Dividends declared Retained eamings end (480,000) (250,000) (150,000) 150,000 100,000 (50,000) _ 200,000 (60,000) 300,000 500,000 (100,000) 700,000 BALANCE SHEET Cash 300,000 125,000 30,000 45,000 Receivables Inventory Investmentin Subsidiary PPE 100,000 650,000 350,000 900,000 350.000. Total 2,300,000 550,000 Liabilities Outstanding shares Retainedeamings 600,000 150,000 200,000 200.000. 1,000,000 700.000 Total 2,300,000 550,000 AdditionalInfomation: 1. 2. The undervalued PPE of Subsidiary on the date of acquisition has a remaining useful life of 5-years. Subsidiary Company owes Parent Company P5,000 on December 31, 2x19.

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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