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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Parent and Sub Inc had the following
Assuming that Consolidated Financial Statements were prepared on that date, the
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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