On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition: On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach). Pfizer Corporation Vaxx Corporation Cash 60,000 20,000 Accounts receivable 80,000 30,000 Inventory 90,000 40,000 Land 100,000 40,000 Buildings and equipment 200,000 150,000 Less: Accumulated depreciation (80,000) (50,000) Investment in Vaxx Corp. stock 160,000 - Total Assets 610,000 230,000 Accounts payable 110,000 30,000 Bonds payable 95,000 40,000 Common stock 200,000 40,000 Retained earnings 205,000 120,000 Total Liabilities and Equity 610,000 230,000 What amount of total liabilities will be reported in the consolidated balance sheet prepared immediately after the business combination? a. 280,000 b. 395,000 c. 275,000 d. 195,000
On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp.’s common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition:
- On the date of the business combination, the book values of Vaxx Corp’s net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full
goodwill approach).
|
Pfizer Corporation |
Vaxx Corporation |
Cash |
60,000 |
20,000 |
|
80,000 |
30,000 |
Inventory |
90,000 |
40,000 |
Land |
100,000 |
40,000 |
Buildings and equipment |
200,000 |
150,000 |
Less: |
(80,000) |
(50,000) |
Investment in Vaxx Corp. stock |
160,000 |
- |
Total Assets |
610,000 |
230,000 |
|
|
|
Accounts payable |
110,000 |
30,000 |
Bonds payable |
95,000 |
40,000 |
Common stock |
200,000 |
40,000 |
|
205,000 |
120,000 |
Total Liabilities and Equity |
610,000 |
230,000 |
What amount of total liabilities will be reported in the consolidated
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