On January 1, Parent Company acquired 90% of Subsidiary Company in exchange for 5,400 shares of P10 par common stock having a market value of P120,600. Parent and Subsidiary condensed balance sheet on January 1, were as follows: Parent Subsidiury Company P' 37,400 Assets Company P'30,900 Cash Accounts receivable, net 34,200 22,900 179,000 9,100 Inventories Equipment, net Patents 16,100 40,000 P 267,000 10,000 PI12,600 Total Assets Liabilities and Equities Accounts Payable Bonds Payable Common stock, PI0 par Share Premium P 4,000 P 6,600 100,000 100,000 15,000 48,000 P 267,000 50,000 15,000 Retained earnings Total Liabilities and Equities 41.000 P 112,600 At the date of acquisition, all assets and liabilities of Subsidiary Company have book value approximately equal to their respective market values except the following as determined by appraisal as follows: Inventories (FIFO method) Equipment (net-remaining life 4 yeurs) Patents (remaining life 10 years) P 17,100 48,000 13,000
On January 1, Parent Company acquired 90% of Subsidiary Company in exchange for 5,400 shares of P10 par common stock having a market value of P120,600. Parent and Subsidiary condensed balance sheet on January 1, were as follows: Parent Subsidiury Company P' 37,400 Assets Company P'30,900 Cash Accounts receivable, net 34,200 22,900 179,000 9,100 Inventories Equipment, net Patents 16,100 40,000 P 267,000 10,000 PI12,600 Total Assets Liabilities and Equities Accounts Payable Bonds Payable Common stock, PI0 par Share Premium P 4,000 P 6,600 100,000 100,000 15,000 48,000 P 267,000 50,000 15,000 Retained earnings Total Liabilities and Equities 41.000 P 112,600 At the date of acquisition, all assets and liabilities of Subsidiary Company have book value approximately equal to their respective market values except the following as determined by appraisal as follows: Inventories (FIFO method) Equipment (net-remaining life 4 yeurs) Patents (remaining life 10 years) P 17,100 48,000 13,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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4. For the year ended December 31, the following results were given:
Dividend Paid Net Income
Parent Company P15,000 P30,200
Subsidiary Company 4,000 9,400
The investment balance on December 31:
A. P 0 C. P 122,160
B. P 120,600 D. P 125,460
5. Using the same information in No. 5, compute the Dividend Income for the year:
A. P 0 C. P 4,000
B. P 3,600 D. P 8,400
6. Using the same information in No. 5, the non-controlling interest in net income on December 31:
A. P 0 C. P 610
B. P 540 D. P 940
Transcribed Image Text:On January 1, Parent Company acquired 90% of Subsidiary Company in exchange for 5,400 shares of P10 par
common stock having a market value of P120,600. Parent and Subsidiary condensed balance sheet on January 1,
were as follows:
Subsidiary
Company
P 37,400
9,100
Assets
Parent
Сompany
P 30,900
34,200
Cash
Accounts receivable, net
Inventories
22,900
179,000
16,100
40,000
Equipment, net
Patents
10,000
P 267,000
Total Assets
PI12,600
Liabilities and Equities
Accounts Payable
Bonds Payable
Common stock, P10 par
P 4,000
P 6,600
100,000
100,000
15,000
48.000
P 267,000
50,000
15,000
Share Premium
Retained earnings
41,000
P 112,600
Total Liabilities and Equities
At the date of acquisition, all assets and liabilities of Subsidiary Company have book value approximately equal to
their respective market values except the following as determined by appraisal as follows:
Inventories (FIFO method)
Equipment (net-remaining life 4 years)
Patents (remaining life 10 years)
P 17,100
48,000
13,000
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