On January 1, 2006, Polk Corp. and Strass Corp. had condensed balance sheets as follows: Polk Strass Current assets $ 70,000 $20,000 Noncurrent assets 90,000 40,000 Total Assets $160,000 $60,000 Current liabilities $ 30,000 $10,000 Long-term debt 50,000 -- Stockholders’ equity 80,000 50,000 Total liabilities and stockholders’ equity $160,000 $60,000 On January 2, 2018, Polk borrowed P60,000 and used the proceeds to purchase 90% of the outstanding common shares of Strass. This debt is payable in ten equal annual principal payments, plus interest, beginning December 30, 2018. The excess cost of the investment over Strass’s book value of acquired net assets should be allocated 60% to inventory and 40% to goodwill. On January 1, 2018, the fair value of Polk shares held by noncontrolling interest parties was P10,000. Questions: Current assets should be ? P90,000 P99,000 P100,000 P102,000 Noncurrent assets should be ? P130,000 P136,000 P138,000 P140,000 . Current liabilities should be ? P50,000 P46,000 P40,000 P50,000 Noncurrent liabilities should be ? P115,000 P109,000 c. P104,000 d. P55,000 Stockholder’s equity including noncontrolling interests should be? P80,000 b. P85,000 c. P90,000 d. P130,000
On January 1, 2006, Polk Corp. and Strass Corp. had condensed balance sheets as follows:
|
|
Polk |
Strass |
|
|
Current assets |
$ 70,000 |
$20,000 |
|
|
Noncurrent assets |
90,000 |
40,000 |
|
|
Total Assets |
$160,000
|
$60,000 |
|
|
Current liabilities |
$ 30,000 |
$10,000 |
|
|
Long-term debt |
50,000 |
-- |
|
|
|
80,000 |
50,000 |
|
|
Total liabilities and stockholders’ equity |
$160,000 |
$60,000 |
|
On January 2, 2018, Polk borrowed P60,000 and used the proceeds to purchase 90% of the outstanding common shares of Strass. This debt is payable in ten equal annual principal payments, plus interest, beginning December
30, 2018. The excess cost of the investment over Strass’s book value of acquired net assets should be allocated
60% to inventory and 40% to
Questions:
Current assets should be ?
- P90,000
- P99,000
- P100,000
- P102,000
Noncurrent assets should be ?
- P130,000
- P136,000
- P138,000
- P140,000
. Current liabilities should be ?
- P50,000
- P46,000
- P40,000
- P50,000
Noncurrent liabilities should be ?
- P115,000
- P109,000 c. P104,000 d. P55,000
Stockholder’s equity including noncontrolling interests should be?
- P80,000 b. P85,000 c. P90,000 d. P130,000
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
