Homework Help is Here – Start Your Trial Now!
Business
Accounting
How much is the investment balance on December 31?

How much is the investment balance on December 31?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

How much is the investment balance on December 31?

On January 1, Parent Company acquired 90% of Subsidiary Company in exchange for 5,400 shares of P10 par common stock having a market value of P120,600. Parent and Subsidiary condensed balance sheet on January 1, were as follows: Assets Parent Subsidiary Company Company 30,900 34,200 22,900 179,000 37,400 9,100 16,100 40,000 10,000 112,600 Cash P Accounts receivable, net Inventories Equipment, net Patents Total Assets P 267,000 Liabilities and Equities Accounts Payable Bonds Payable Common stock, P10 par 4,000 100,000 100,000 15,000 48,000 267,000 P 6,600 50,000 15,000 41,000 112,600 Share Premium Retained earnings Total Liabilities and Equities At the date of acquisition, all assets and liabilities of Subsidiary Company have book value approximately equal to their respective market values except the following as determined by appraisal as follows: Inventories (FIFO method) Equipment (net-remaining life 4 years) Patents (remaining life 10 years) 17,100 48,000 13,000 P ADDITIONAL INFORMATION: For the year ended December 31, the following results were given: Dividend Paid Net Income Parent Company 15,000 4,000 30,200 9,400 Subsidiary Company
Transcribed Image Text:On January 1, Parent Company acquired 90% of Subsidiary Company in exchange for 5,400 shares of P10 par common stock having a market value of P120,600. Parent and Subsidiary condensed balance sheet on January 1, were as follows: Assets Parent Subsidiary Company Company 30,900 34,200 22,900 179,000 37,400 9,100 16,100 40,000 10,000 112,600 Cash P Accounts receivable, net Inventories Equipment, net Patents Total Assets P 267,000 Liabilities and Equities Accounts Payable Bonds Payable Common stock, P10 par 4,000 100,000 100,000 15,000 48,000 267,000 P 6,600 50,000 15,000 41,000 112,600 Share Premium Retained earnings Total Liabilities and Equities At the date of acquisition, all assets and liabilities of Subsidiary Company have book value approximately equal to their respective market values except the following as determined by appraisal as follows: Inventories (FIFO method) Equipment (net-remaining life 4 years) Patents (remaining life 10 years) 17,100 48,000 13,000 P ADDITIONAL INFORMATION: For the year ended December 31, the following results were given: Dividend Paid Net Income Parent Company 15,000 4,000 30,200 9,400 Subsidiary Company
Expert Solution
steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Investments and Financial instruments
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.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS