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Parent and Sub Inc had the following balance sheets on December 31, 2021 (see image below). On January 1, 2022 Parent purchased all of Sub Inc’s Common Shares for P40,000 in cash. On that date, Sub’s Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, the Current Assets of the combined entity should be valued at how much?  Assuming that Consolidated Financial Statements were prepared on that date, the Goodwill of the combined entity should be valued at how much?

Parent and Sub Inc had the following balance sheets on December 31, 2021 (see image below). On January 1, 2022 Parent purchased all of Sub Inc’s Common Shares for P40,000 in cash. On that date, Sub’s Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, the Current Assets of the combined entity should be valued at how much?  Assuming that Consolidated Financial Statements were prepared on that date, the Goodwill of the combined entity should be valued at how much?

FINANCIAL ACCOUNTING
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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Parent and Sub Inc had the following balance sheets on December 31, 2021 (see image below). On January 1, 2022 Parent purchased all of Sub Inc’s Common Shares for P40,000 in cash. On that date, Sub’s Current Assets and Fixed Assets were worth P26,000 and P54,000, respectively. Assuming that Consolidated Financial Statements were prepared on that date, the Current Assets of the combined entity should be valued at how much? 

Assuming that Consolidated Financial Statements were prepared on that date, the Goodwill of the combined entity should be valued at how much?

Current Assets Fixed Assets (net) Total Assets Curent Liabilities Bonds Payable Common Shares Retained Earnings Total Liabilities and Equity Parent P 60,000 100,000 P160.000 P 42,000 20,000 90,000 8,000 P160.000 Sub P10,000 60,000 P70.000 P35,000 12,000 12,000 11,000 P70.000
Transcribed Image Text:Current Assets Fixed Assets (net) Total Assets Curent Liabilities Bonds Payable Common Shares Retained Earnings Total Liabilities and Equity Parent P 60,000 100,000 P160.000 P 42,000 20,000 90,000 8,000 P160.000 Sub P10,000 60,000 P70.000 P35,000 12,000 12,000 11,000 P70.000
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