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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
After the business combination on the basis of full-
a. P42,000
b. P52,500
c. P60,900
d. P64,500
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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