Compute for consolidated retained earnings on December 31, 2021. On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. byissuing 5,000 shares with fair value of P60 per share and par valueof P40 per share. XYZ's shareholders' equity as of January 1, 2021comprises the following:292,000Total liabilities120,000680,000Share capitalShare premium200,000(at carrying amounts)260,000Share capitalRetained earningsTotal equity200,00096,000Retained440,000earnings176,000296,0001,380,000Total equity376,000On January 1, 2021, the fair values of the assets and liabilities ofXYZ, Inc. were determined by appraisal, as follows:XYZ, Inc.ТOTALLIABILITIES1,672,000496,000CarryingFair valueAND EQUITYamountsFair valuesincrementCash20,00020,000Statements of profit or lossFor the year ended December 31, 2021Accounts receivable48,00048,000Inventory92,000124,00032,000АВС Со.XYZ, Inc.Equipment200,000240,00040,000Sales1,200,000480,000Cost of goods sold(660,000)(288,000)Accumulated(40,000)(48,000)(8,000)depreciationGross profit540,000192,000Accounts payable(24,000)(24,000)Depreciation expense(160,000)(40,000)Net assets296,000360,00064,000(128,000)(12,000)Distribution costs(72,000)Interest expenseProfit for the yearThe remaining useful life of the equipment is 4 years. During 2021,no dividends were declared by either ABC or XYZ. There were also240,00080,000no inter-company transactions. The group determined thatgoodwill is impaired by P4,000. ABC's and XYZ's individualfinancial statements at year-end are shown below:Statements of financial position As at December 31, 2021On acquisition date, ABC Co. elected to measure non-controllinginterest at fair value. A value of P75,000 is assigned to the non-controlling interest.АВС Со.XYZ, Inc.ASSETSCash92,000228,000Accounts300,00088,000receivableInventory420,00060,000Investment in300,000subsidiaryEquipment800,000200,000Accumulated(240,000)(80,000)depreciationTOTAL ASSETS1,672,000496,000

At the time of acquisition identified assets and liabilities are recorded in the books of the parent…

On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P60 per share and par value of P40 per share. XYZ's shareholders' equity as of January 1, 2021 comprises the following: 292,000 Total liabilities 120,000 680,000 Share capital Share premium 200,000 (at carrying amounts) 260,000 Share capital Retained earnings Total equity 200,000 Retained 440,000 96,000 earnings 176,000 296,000 1,380,000 Total equity 376,000 On January 1, 2021, the fair values of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows: TOTAL LIABILITIES 1,672,000 496,000 Fair value Fair values increment AND EQUITY Carrying amounts 20,000 XYZ, Inc. Cash 20,000 Statements of profit or loss For the year ended December 31, 2021 Accounts receivable 48,000 48,000 Inventory 92,000 124,000 32,000 ABC Co. XYZ, Inc. 200,000 240,000 40,000 1,200,000 480,000 Equipment Accumulated depreciation Sales Cost of goods sold (660,000) (288,000) (40,000) (48,000) (8,000) Gross profit 540,000 192,000 Accounts payable Net assets (24,000) (24,000) Depreciation expense (160,000) (40,000) 296,000 360,000 64,000 Distribution costs (128,000) (72,000) (12,000) 240,000 Interest expense The remaining useful life of the equipment is 4 years. During 2021, no dividends were declared by either ABC or XYZ. There were also Profit for the year 80,000 no inter-company transactions. The group determined that goodwill is impaired by p4,000. ABC's and XYZ's individual On acquisition date, ABC Co. elected to measure non-controlling interest at fair value. A value of P75,000 is assigned to the non- financial statements at year-end are shown below: Statements of financial position As at December 31, 2021 ABC Co. controlling interest. XYZ, Inc. ASSETS Cash 92,000 228,000 Accounts 300,000 88,000 receivable Inventory 420,000 60,000 Investment in 300,000 subsidiary Equipment 800,000 200,000 Accumulated (240,000) (80,000) depreciation TOTAL ASSETS 1,672,000 496,000