On January 1, 20X2, Parent Inc. issued 32,000 shares of its P10 par value common stock for all the outstanding shares of Son Company. The fair value of Parent Inc.'s stock is P25 per share. Parent Inc. pays P50,000 in registering the stocks. Given below are the statements of financial position (SFP) of the companies before the acquisition: Parent Inc. Statement of Financial Position January 1, 20X2 Assets Liabilities and Equity Cash Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets P200,000 Accounts Payable 185,000 Bonds Payable 190,000 Common Stock, P10 par value 300,000 Additional Paid-In Capital (APIC) 740,000 Retained Earnings 420,000 Total Liabilities and Equity P2,035,000 P210,000 420,000 400,000 500,000 505,000 P2,035,000 Son Company Statement of Financial Position January 1, 20X2 Book Value Fair Value P55,000 130,000 85,000 320,000 140,000 P730,000 Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets P55,000 150,000 130,000 500,000 300,000 P1,135,000 Accounts Payable Bonds Payable Common Stock, P2 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equity P160,000 250,000 40,000 160,000 120,000 P730,000 P160,000 250,000 Required: Prepare the consolidated statement of financial position on the date of acquisition by showing the consolidation procedures. Tip: Follow the process in the handout.
On January 1, 20X2, Parent Inc. issued 32,000 shares of its P10 par value common stock for all the outstanding shares of Son Company. The fair value of Parent Inc.'s stock is P25 per share. Parent Inc. pays P50,000 in registering the stocks. Given below are the statements of financial position (SFP) of the companies before the acquisition: Parent Inc. Statement of Financial Position January 1, 20X2 Assets Liabilities and Equity Cash Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets P200,000 Accounts Payable 185,000 Bonds Payable 190,000 Common Stock, P10 par value 300,000 Additional Paid-In Capital (APIC) 740,000 Retained Earnings 420,000 Total Liabilities and Equity P2,035,000 P210,000 420,000 400,000 500,000 505,000 P2,035,000 Son Company Statement of Financial Position January 1, 20X2 Book Value Fair Value P55,000 130,000 85,000 320,000 140,000 P730,000 Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets P55,000 150,000 130,000 500,000 300,000 P1,135,000 Accounts Payable Bonds Payable Common Stock, P2 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equity P160,000 250,000 40,000 160,000 120,000 P730,000 P160,000 250,000 Required: Prepare the consolidated statement of financial position on the date of acquisition by showing the consolidation procedures. Tip: Follow the process in the handout.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 20X2, Parent Inc. issued 32,000 shares of its P10 par value common stock for all the outstanding
shares of Son Company. The fair value of Parent Inc.'s stock is P25 per share. Parent Inc. pays P50,000 in
registering the stocks. Given below are the statements of financial position (SFP) of the companies before the
acquisition:
Parent Inc.
Statement of Financial Position
January 1, 20X2
Assets
Liabilities and Equity
P210,000
420,000
400,000
500,000
505,000
P2,035,000
Cash
P200,000 Accounts Payable
185,000 Bonds Payable
190,000 Common Stock, P10 par value
300,000 Additional Paid-In Capital (APIC)
740,000 Retained Earnings
420,000 Total Liabilities and Equity
P2,035,000
Accounts Receivable
Inventory
Land
Building, net of depreciation
Equipment, net of depreciation
Total Assets
Son Company
Statement of Financial Position
January 1, 20X2
Book Value Fair Value
P55,000
150,000
130,000
500,000
300,000
P1,135,000
Accounts Receivable
Inventory
Land
P55,000
130,000
85,000
320,000
140,000
P730,000
Building, net of depreciation
Equipment, net of depreciation
Total Assets
P160,000
250,000
Accounts Payable
Bonds Payable
Common Stock, P2 par value
Additional Paid-In Capital
Retained Earnings
Total Liabilities and Equity
P160.000
250,000
40,000
160,000
120,000
P730,000
Required: Prepare the consolidated statement of financial position on the date of acquisition by showing the
consolidation procedures. Tip: Follow the process in the handout.
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