On January 1, BB Acquired 60 percent of the outstanding voting stock of SS for P260,000 cash consideration. The remaining 40 percent of SS had an acquisition date fair value of P65,000. On January 1, SS possessed equipment (5-year life) that was undervalued on its books P25,000. SS also had developed several secret formulas that BB assessed at P50,000. Theses formulas, although not recorded on SS's financial records, were estimated to have a 20-year future life. BB also determined that the inventory of SS is overvalued by P10,000. 80% of these inventories remain unsold by the end of the year. As of December 31, the financial statements appeared as follows: BB Revenues (from sales and dividends) Cost of goods sold Expenses P (300, 000) P (200, 000) 140, 000 20, 000 P (140, 000) P (110, 000) 80, 000 10, 000 Net Income Retained earnings 1/1 P (300, 000) P (150, 000) (110, 000) 10,000 P (440, 000) P (250, 000) Net Income (140, 000) Dividends paid Retained earnings 12/31 -0- P 210, 000 P90, 000 110, 000 Cash and Receivables Inventory Investment in SS 150, 000 260, 000 440, 000 P 1,060, 000 -0- 300, 000 P500, 000 Equipment (net) Total Assets Liabilities P (420, 000) P (150, 000) (200, 000) (440, 000) P (1,060,000) P (500, 000) Common stock (100, 000) Retained earnings 12/31 Total Liabilities and Equities (250, 000) Determine the consolidated assets as of December 31.
On January 1, BB Acquired 60 percent of the outstanding voting stock of SS for P260,000 cash consideration. The remaining 40 percent of SS had an acquisition date fair value of P65,000. On January 1, SS possessed equipment (5-year life) that was undervalued on its books P25,000. SS also had developed several secret formulas that BB assessed at P50,000. Theses formulas, although not recorded on SS's financial records, were estimated to have a 20-year future life. BB also determined that the inventory of SS is overvalued by P10,000. 80% of these inventories remain unsold by the end of the year. As of December 31, the financial statements appeared as follows: BB Revenues (from sales and dividends) Cost of goods sold Expenses P (300, 000) P (200, 000) 140, 000 20, 000 P (140, 000) P (110, 000) 80, 000 10, 000 Net Income Retained earnings 1/1 P (300, 000) P (150, 000) (110, 000) 10,000 P (440, 000) P (250, 000) Net Income (140, 000) Dividends paid Retained earnings 12/31 -0- P 210, 000 P90, 000 110, 000 Cash and Receivables Inventory Investment in SS 150, 000 260, 000 440, 000 P 1,060, 000 -0- 300, 000 P500, 000 Equipment (net) Total Assets Liabilities P (420, 000) P (150, 000) (200, 000) (440, 000) P (1,060,000) P (500, 000) Common stock (100, 000) Retained earnings 12/31 Total Liabilities and Equities (250, 000) Determine the consolidated assets as of December 31.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Determine the consolidated assets as of December 31.
Transcribed Image Text:On January 1, BB Acquired 60 percent of the outstanding voting stock of SS for P260,000 cash consideration. The remaining
40 percent of SS had an acquisition date fair value of P65,000. On January 1, SS possessed equipment (5-year life) that was
undervalued on its books P25,000. SS also had developed several secret formulas that BB assessed at P50,000. Theses
formulas, although not recorded on SS's financial records, were estimated to have a 20-year future life. BB also determined
that the inventory of SS is overvalued by P10,000. 80% of these inventories remain unsold by the end of the year. As of
December 31, the financial statements appeared as follows:
BB
Revenues (from sales and dividends)
Cost of goods sold
Expenses
P (300, 000) P (200, 000)
140, 000
80, 000
10, 000
P (140, 000) P (110, 000)
20, 000
Net Income
Retained earnings 1/1
P (300, 000) P (150, 000)
(110, 000)
10,000
P (440, 000) P (250, 000)
Net Income
(140, 000)
Dividends paid
Retained earnings 12/31
-0-
Cash and Receivables
P 210, 000
P90, 000
110, 000
Inventory
Investment in SS
Equipment (net)
Total Assets
150, 000
260, 000
440, 000
P 1,060, 000
-0-
300, 000
P500, 000
Liabilities
P (420, 000) P (150, 000)
(200, 000)
(440, 000)
P (1,060,000) P (500, 000)
Common stock
(100, 000)
(250, 000)
Retained earnings 12/31
Total Liabilities and Equities
Determine the consolidated assets as of December 31.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education