Parent Corporation acquired all the identifiable net assets of Sub Company by issuing ordinary shares on January 2.2022. Partial balance sheet for the companies prior to the business combination and immediately following thecombination is provided:Parent65,000Consolidated60,000Sub25,00020,00045,000140,00010,000240,000CashAccounts receivable72,00094,000InventoryBuildingsGoodwill33,000400,00088,000650,000Total assets570,00075.000350,000Accounts payableBonds payableCommon stock, P2 parShare premiumRetained earningsTotal liabilities and equities50,00025,000100,00025,00020,00070,000240,000250,000100,000160,00065,000105,000570,000100,000The only consideration transferred is the issuance of shares with fair value of P8. Parent also paid businesscombination expenses, share issue costs are twice the amount of indirect costs. Parent and Sub are SMES.

Total Assets: When all assets and obligations are taken into account, total assets are the…

Partial balance sheet for the companies prior to the business combination and immediately following the nation is provided: Parent 65,000 72,000 33,000 Sub 25,000 20,000 45,000 140,000 10,000 240,000 Consolidated 60,000 94,000 88,000 650,000 Cash Accounts receivable Inventory Buildings Goodwil Total assets 400,000 570,000 Accounts payable Bonds payable Common stock, P2 par Share premium 50,000 250,000 100,000 65,000 25,000 100,000 25,000 20,000 75,000 350,000 160,000 Retained earnings 105.000 70.000 100 000

Partial balance sheet for the companies prior to the business combination and immediately following the nation is provided: Parent 65,000 72,000 33,000 Sub 25,000 20,000 45,000 140,000 10,000 240,000 Consolidated 60,000 94,000 88,000 650,000 Cash Accounts receivable Inventory Buildings Goodwil Total assets 400,000 570,000 Accounts payable Bonds payable Common stock, P2 par Share premium 50,000 250,000 100,000 65,000 25,000 100,000 25,000 20,000 75,000 350,000 160,000 Retained earnings 105.000 70.000 100 000

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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