January 1, 2021 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 ABC Co. 20,000 XYZ, Inc. 10,000 | Cash Accounts receivable 60,000 80,000 150,000 24,000 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 Retained earnings Total liabilities and equity 130,000 100,000 670,000 48,000 160,000 On January 1, 2021, the fair value of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows: Fair value Fair values 10,000 Carrying XYZ, Inc. increment amounts 10,000 24,000 Cash Accounts receivable 24,000 Inventory 46,000 62,000 16,000 Equipment Accumulated depreciation 100,000 120,000 20,000 (4,000) Accounts payable Net assets (20,000) (24,000) (12,000) (12,000) 148,000 180,000 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.
January 1, 2021 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 ABC Co. 20,000 XYZ, Inc. 10,000 | Cash Accounts receivable 60,000 80,000 150,000 24,000 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 Retained earnings Total liabilities and equity 130,000 100,000 670,000 48,000 160,000 On January 1, 2021, the fair value of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows: Fair value Fair values 10,000 Carrying XYZ, Inc. increment amounts 10,000 24,000 Cash Accounts receivable 24,000 Inventory 46,000 62,000 16,000 Equipment Accumulated depreciation 100,000 120,000 20,000 (4,000) Accounts payable Net assets (20,000) (24,000) (12,000) (12,000) 148,000 180,000 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
ABC Co.
XYZ, Inc.
Cash
20,000
10,000
Accounts receivable
60,000
24,000
80,000
Inventory
Investment in subsidiary
Equipment
Accumulated depreciation
Total assets
46,000
150,000
400,000
(40,000)
670,000
100,000
(20,000)
160,000
Accounts payable
40,000
60,000
12,000
Bonds payable
Share capital
340,000
130,000
100,000
Share premium
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 value
increment
Fair
XYZ, Inc.
values
атounts
10,000
Cash
10,000
Accounts receivable
24,000
24,000
Inventory
46,000
62,000
16,000
Equipment
100,000
120,000
(24,000)
20,000
(4,000)
(20,000)
Accumulated depreciation
Accounts payable
Net assets
(12,000)
(12,000)
148,000 180,000
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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