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Power Corporation acquired 70 percent of Silk Corporation's common stock on December 31, 20x2. Balance sheet data for the two companies immediately following acquisition follow: Item Роwer 44,000 110,000 Silk 30,000 Accounts Receivable Inventory Land 45,000 70,000 25,000 130,000 Buildings and equipment Less: Accumulated depreciation Investmentin Silk Corporation stock Total Assets 80,000 500,000 (223,000) 150,500 P 791,500 P 405,000 400,000 (165,000) Accounts payable Тахes payable Bonds payable Commonstock Retained eamings Total Liabilities and Stockholders' Equity 61,500 P 28,000 95,000 280,000 150,000 205,000 P 791,500 P 405,000 37,000 200,000 50,000 90,000 After the date of the business combination, the book value of Silk's net assets and liabilities approximated their fair value except for inventory, which had a fair value of P85,000, and land, which had a fair value of P45, 000. The fair value of the non-controlling interest was P64,500 on December 31, 20x2.

Power Corporation acquired 70 percent of Silk Corporation's common stock on December 31, 20x2. Balance sheet data for the two companies immediately following acquisition follow: Item Роwer 44,000 110,000 Silk 30,000 Accounts Receivable Inventory Land 45,000 70,000 25,000 130,000 Buildings and equipment Less: Accumulated depreciation Investmentin Silk Corporation stock Total Assets 80,000 500,000 (223,000) 150,500 P 791,500 P 405,000 400,000 (165,000) Accounts payable Тахes payable Bonds payable Commonstock Retained eamings Total Liabilities and Stockholders' Equity 61,500 P 28,000 95,000 280,000 150,000 205,000 P 791,500 P 405,000 37,000 200,000 50,000 90,000 After the date of the business combination, the book value of Silk's net assets and liabilities approximated their fair value except for inventory, which had a fair value of P85,000, and land, which had a fair value of P45, 000. The fair value of the non-controlling interest was P64,500 on December 31, 20x2.

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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After the business combination on the basis of full-goodwill approach, what amount of non-controlling interest will be reported?

a. P42,000

b. P52,500

c. P60,900

d. P64,500

Power Corporation acquired 70 percent of Silk Corporation's common stock on December 31, 20x2. Balance sheet data for the two companies immediately following acquisition follow: Item Power Silk 44,000 110,000 130,000 80,000 500,000 (223,000) 150,500 P 791.500 P 405,000 30,000 45,000 70,000 25,000 400,000 (165,000) Accounts Receivable Inventory Land Buildings and equipment Less: Accumulated depreciation Investmentin Silk Corporation stock TotalAssets Accounts payable Taxes payable Bonds payable Commonstock 61,500 P 28,000 95,000 280,000 150,000 205,000 P 791.500 37,000 200,000 50,000 90,000 P 405,000 Retained eamings Total Liabilities and Stockholders' Equity After the date of the business combination, the book value of Silk's net assets and liabilities approximated their fair value except for inventory, which had a fair value of P85,000, and land, which had a fair value of P45, 000. The fair value of the non-controlling interest was P64,500 on December 31, 20x2.
Transcribed Image Text:Power Corporation acquired 70 percent of Silk Corporation's common stock on December 31, 20x2. Balance sheet data for the two companies immediately following acquisition follow: Item Power Silk 44,000 110,000 130,000 80,000 500,000 (223,000) 150,500 P 791.500 P 405,000 30,000 45,000 70,000 25,000 400,000 (165,000) Accounts Receivable Inventory Land Buildings and equipment Less: Accumulated depreciation Investmentin Silk Corporation stock TotalAssets Accounts payable Taxes payable Bonds payable Commonstock 61,500 P 28,000 95,000 280,000 150,000 205,000 P 791.500 37,000 200,000 50,000 90,000 P 405,000 Retained eamings Total Liabilities and Stockholders' Equity After the date of the business combination, the book value of Silk's net assets and liabilities approximated their fair value except for inventory, which had a fair value of P85,000, and land, which had a fair value of P45, 000. The fair value of the non-controlling interest was P64,500 on December 31, 20x2.
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