On January 1, 2021, PARKSOOYOUNG acquired all the outstanding shares of SUNGJAE for P600,000. The shareholders’ equity of SUNGJAE on this date amounted to P600,000. The net assets of SUNGJAE on this day were fairly valued except for inventories which were overstated by P50,000, equipment which was understated by P75,000, and building which was overstated by P125,000. Only half of the inventories were sold during 2021. The useful lives of the equipment and the building at the beginning of 2021 were 3 years and 5 years remaining, respectively. On December 31, 2021, the statements of financial position of PARKSOOYOUNG and SUNGJAE are as follows: How much is the consolidated total assets as of December 31, 2021? a. 4,250,000 b. 4,125,000 c. 4,275,000 d. 4,150,000
On January 1, 2021, PARKSOOYOUNG acquired all the outstanding shares of SUNGJAE for P600,000. The shareholders’ equity of SUNGJAE on this date amounted to P600,000. The net assets of SUNGJAE on this day were fairly valued except for inventories which were overstated by P50,000, equipment which was understated by P75,000, and building which was overstated by P125,000. Only half of the inventories were sold during 2021. The useful lives of the equipment and the building at the beginning of 2021 were 3 years and 5 years remaining, respectively. On December 31, 2021, the statements of financial position of PARKSOOYOUNG and SUNGJAE are as follows: How much is the consolidated total assets as of December 31, 2021? a. 4,250,000 b. 4,125,000 c. 4,275,000 d. 4,150,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2021, PARKSOOYOUNG acquired all the outstanding shares of SUNGJAE for P600,000. The shareholders’ equity of SUNGJAE on this date amounted to P600,000. The net assets of SUNGJAE on this day were fairly valued except for inventories which were overstated by P50,000, equipment which was understated by P75,000, and building which was overstated by P125,000. Only half of the inventories were sold during 2021. The useful lives of the equipment and the building at the beginning of 2021 were 3 years and 5 years remaining, respectively. On December 31, 2021, the statements of financial position of PARKSOOYOUNG and SUNGJAE are as follows:
How much is the consolidated total assets as of December 31, 2021?
a. 4,250,000
b. 4,125,000
c. 4,275,000
d. 4,150,000
Transcribed Image Text:On January 1, 2021, PARKSOOYOUNG acquired all the outstanding shares of
SUNGJAE for P600,000. The shareholders' equity of SUNGJAE on this date amounted
to P600,000. The net assets of SUNGJAE on this day were fairly valued except for
inventories which were overstated by P50,000, equipment which was understated by
P75,000, and building which was overstated by P125,000. Only half of the inventories
were sold during 2021. The useful lives of the equipment and the building at the
beginning of 2021 were 3 years and 5 years remaining, respectively. On December 31,
2021, the statements of financial position of PARKSOOYOUNG and SUNGJAE are as
follows:
PARKSOOYOUNG
SUNGJAE
Cash
300,000
300,000
Inventory
400,000
250,000
Equipment
1,000,000
900,000
Building
600,000
500,000
Liabilities
1,100,000
500,000
Share capital
600,000
600,000
Retained earnings
600,000
850,000
How much is the consolidated total assets as of December 31, 2021?
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