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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 (480,000) (250,000) Operating expenses Net income Retained eamings, Jan 1, 2019 Dividends declared Retained eamings end (150,000) 150,000 (60,000) 300,000 500,000 (100,000) 100,000 (50,000) 200,000 700,000 BALANCE SHEET Cash 300,000 100,000 650,000 350,000 125,000 30,000 45,000 Receivables Inventory Investmentin Subsidiary PPE 900,000 350.000 Total 2,300,000 550,000 Liabilities Outstanding shares Retainedeamings 600,000 1,000,000 700 000 2,300,000 550,000 150,000 200,000 200 000. Total Additional Infomation: 1. The undervalued PPE of Subsidiary on the date of acquisition has a remaining useful life of 5-ycars. 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 (480,000) (250,000) Operating expenses Net income Retained eamings, Jan 1, 2019 Dividends declared Retained eamings end (150,000) 150,000 (60,000) 300,000 500,000 (100,000) 100,000 (50,000) 200,000 700,000 BALANCE SHEET Cash 300,000 100,000 650,000 350,000 125,000 30,000 45,000 Receivables Inventory Investmentin Subsidiary PPE 900,000 350.000 Total 2,300,000 550,000 Liabilities Outstanding shares Retainedeamings 600,000 1,000,000 700 000 2,300,000 550,000 150,000 200,000 200 000. Total Additional Infomation: 1. The undervalued PPE of Subsidiary on the date of acquisition has a remaining useful life of 5-ycars. Subsidiary Company owes Parent Company P5,000 on December 31, 2x19.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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How much is the consolidated liabilities on December 31, 2x19?

Financial statements for Parent and Subsidiary for the year ended December 31, 2x19 follow: INCOME AND RETAINED EARNINGS Parent Subsidiary Company Company 800,000 40,000 (480,000) (250,000) (60.000) 300,000 500,000 (100,000) Sales 550,000 Dividend income Cost of sales Operating expenses Net income Retained eamings, Jan 1, 2019 Dividends declared (150.000) 150,000 100,000 (50.000) Retained eamings end 700,000 200,000 BALANCE SHEET Cash 300,000 125,000 Receivables 100,000 650,000 350,000 900.000 30,000 45,000 Inventory Investmentin Subsidiary PPE 350,000 Total 2,300,000 550,000 600,000 1,000,000 Liabilities 150,000 200,000 Outstandingshares Retainedeamings 700.000 200.000 Total 2,300,000 550,000 AdditionalInfomation: 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.
Transcribed Image Text:Financial statements for Parent and Subsidiary for the year ended December 31, 2x19 follow: INCOME AND RETAINED EARNINGS Parent Subsidiary Company Company 800,000 40,000 (480,000) (250,000) (60.000) 300,000 500,000 (100,000) Sales 550,000 Dividend income Cost of sales Operating expenses Net income Retained eamings, Jan 1, 2019 Dividends declared (150.000) 150,000 100,000 (50.000) Retained eamings end 700,000 200,000 BALANCE SHEET Cash 300,000 125,000 Receivables 100,000 650,000 350,000 900.000 30,000 45,000 Inventory Investmentin Subsidiary PPE 350,000 Total 2,300,000 550,000 600,000 1,000,000 Liabilities 150,000 200,000 Outstandingshares Retainedeamings 700.000 200.000 Total 2,300,000 550,000 AdditionalInfomation: 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.
On January 5, 20x9, Parent Company acquired 80% of the outstanding shares of Subsidiary Company for P350,000. The financial statements of Parent and Subsidiary Company before the acquisition follow: Subsidiary Parent Company Company Value 100,000 50,000 Parent Cash 700,000 100,000 55,000 Inventory 300,000 1,000,000 500,000 1,000,000 500,000 365,000 200,000 PPE 350,000 200,000 200,000 100,000 Liabilities Outstanding Shares Retained eamings
Transcribed Image Text:On January 5, 20x9, Parent Company acquired 80% of the outstanding shares of Subsidiary Company for P350,000. The financial statements of Parent and Subsidiary Company before the acquisition follow: Subsidiary Parent Company Company Value 100,000 50,000 Parent Cash 700,000 100,000 55,000 Inventory 300,000 1,000,000 500,000 1,000,000 500,000 365,000 200,000 PPE 350,000 200,000 200,000 100,000 Liabilities Outstanding Shares Retained eamings
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