he equipment has a remaining useful life as of 4 years from January 1, 2021. ABC Co. elects to measure non- hterest as its proportionate share in XYZ's net identifiable assets. Compute for the consolidated asset.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P30 per share
and par value of P20 per share. The financial statements of ABC Co. and XYZ, Inc. immediately after the acquisition are
shown below:
Jan. 1, 2021
XYZ, Inc.
10,000
АВССо.
Cash
20,000
Accounts receivable
60,000
24,000
80,000
150,000
46,000
Inventory
Investment in subsidiary
Equipment
Accumulated depreciation
Total assets
400,000
100,000
(40,000)
670,000
(20,000)
160,000
Accounts payable
Bonds payable
Share capital
40,000
12,000
60,000
340,000
100,000
Share premium
130,000
Retained earnings
Total liabilities and equity
100,000
48,000
670,000
160,000
On January 1, 2021, the fair value of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows:
Carrying
Fair
Fair value
XYZ, Inc.
amounts
values
increment
Cash
10,000
10,000
Accounts receivable
24,000
24,000
Inventory
46,000
62,000
16,000
Equipment
Accumulated depreciation
Accounts payable
Net assets
100,000
(20,000) (24,000)
120,000
20,000
(4,000)
(12,000)
148,000
(12,000)
180,000
32,000
The equipment has a remaining useful life as of 4 years from January 1, 2021. ABC Co. elects to measure non-controlling
interest as its proportionate share in XYZ's net identifiable assets. Compute for the consolidated asset.
Transcribed Image Text:On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P30 per share and par value of P20 per share. The financial statements of ABC Co. and XYZ, Inc. immediately after the acquisition are shown below: Jan. 1, 2021 XYZ, Inc. 10,000 АВССо. Cash 20,000 Accounts receivable 60,000 24,000 80,000 150,000 46,000 Inventory Investment in subsidiary Equipment Accumulated depreciation Total assets 400,000 100,000 (40,000) 670,000 (20,000) 160,000 Accounts payable Bonds payable Share capital 40,000 12,000 60,000 340,000 100,000 Share premium 130,000 Retained earnings Total liabilities and equity 100,000 48,000 670,000 160,000 On January 1, 2021, the fair value of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows: Carrying Fair Fair value XYZ, Inc. amounts values increment Cash 10,000 10,000 Accounts receivable 24,000 24,000 Inventory 46,000 62,000 16,000 Equipment Accumulated depreciation Accounts payable Net assets 100,000 (20,000) (24,000) 120,000 20,000 (4,000) (12,000) 148,000 (12,000) 180,000 32,000 The equipment has a remaining useful life as of 4 years from January 1, 2021. ABC Co. elects to measure non-controlling interest as its proportionate share in XYZ's net identifiable assets. Compute for the consolidated asset.
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