REQUIRED: Determine the amount of goodwill to be reported in the consolidated statement of financial position on May 1, 20x1 if the non-controlling interest is assumed to be measured at fair value. On May 1, 20x1, ABC Inc acquired most of the outstanding shares of XYZ Co for cash. Theincomplete working paper elimination entries on that date for the consolidated statement offinancial position of ABC Inc and its subsidiary are shown below:Stockholders' equity-XYZ2,437,5001,584,375853,125Investment in XYZNon-controlling interestInventories62,500312,50061,250EquipmentPatentGoodwillInvestment in XYZ468,750Non-controlling interest?The purchase price of ABC Inc included a control premium of P68,750.

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Answered: On May 1, 20x1, ABC Inc acquired most…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Determine the amount of goodwill to be reported in the consolidated statement of financial position on May 1, 20x1 if the non-controlling interest is assumed to be measured at fair value.

On May 1, 20x1, ABC Inc acquired most of the outstanding shares of XYZ Co for cash. The
incomplete working paper elimination entries on that date for the consolidated statement of
financial position of ABC Inc and its subsidiary are shown below:
Stockholders' equity-XYZ
2,437,500
1,584,375
853,125
Investment in XYZ
Non-controlling interest
Inventories
62,500
312,500
61,250
Equipment
Patent
Goodwill
Investment in XYZ
468,750
Non-controlling interest
?
The purchase price of ABC Inc included a control premium of P68,750.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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