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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Compute for consolidated
![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
96,000
Retained
440,000
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:
XYZ, Inc.
ТOTAL
LIABILITIES
1,672,000
496,000
Carrying
Fair value
AND EQUITY
amounts
Fair values
increment
Cash
20,000
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
АВС Со.
XYZ, Inc.
Equipment
200,000
240,000
40,000
Sales
1,200,000
480,000
Cost of goods sold
(660,000)
(288,000)
Accumulated
(40,000)
(48,000)
(8,000)
depreciation
Gross profit
540,000
192,000
Accounts payable
(24,000)
(24,000)
Depreciation expense
(160,000)
(40,000)
Net assets
296,000
360,000
64,000
(128,000)
(12,000)
Distribution costs
(72,000)
Interest expense
Profit for the year
The remaining useful life of the equipment is 4 years. During 2021,
no dividends were declared by either ABC or XYZ. There were also
240,000
80,000
no inter-company transactions. The group determined that
goodwill is impaired by P4,000. ABC's and XYZ's individual
financial statements at year-end are shown below:
Statements of financial position As at December 31, 2021
On acquisition date, ABC Co. elected to measure non-controlling
interest at fair value. A value of P75,000 is assigned to the non-
controlling interest.
АВС Со.
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff6d40f40-da42-4427-9be1-0728e2a2b3cb%2F617cef33-ff9d-477b-ba83-09435c4ab8ee%2Fulekqp_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
96,000
Retained
440,000
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:
XYZ, Inc.
ТOTAL
LIABILITIES
1,672,000
496,000
Carrying
Fair value
AND EQUITY
amounts
Fair values
increment
Cash
20,000
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
АВС Со.
XYZ, Inc.
Equipment
200,000
240,000
40,000
Sales
1,200,000
480,000
Cost of goods sold
(660,000)
(288,000)
Accumulated
(40,000)
(48,000)
(8,000)
depreciation
Gross profit
540,000
192,000
Accounts payable
(24,000)
(24,000)
Depreciation expense
(160,000)
(40,000)
Net assets
296,000
360,000
64,000
(128,000)
(12,000)
Distribution costs
(72,000)
Interest expense
Profit for the year
The remaining useful life of the equipment is 4 years. During 2021,
no dividends were declared by either ABC or XYZ. There were also
240,000
80,000
no inter-company transactions. The group determined that
goodwill is impaired by P4,000. ABC's and XYZ's individual
financial statements at year-end are shown below:
Statements of financial position As at December 31, 2021
On acquisition date, ABC Co. elected to measure non-controlling
interest at fair value. A value of P75,000 is assigned to the non-
controlling interest.
АВС Со.
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
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