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 44,000 Silk 30,000 45,000 70,000 Accounts Receivable Inventory Land 110,000 130,000 80,000 500,000 25,000 400,000 Buildings and equipment Less: Accumulated depreciation Investmentin Silk Corporationstock (223,000) 150,500 P 791,500 P 405,000 (165,000) Total Assets Accounts payable Таxes payable Bonds payable 61,500 Р 28,000 95,000 280,000 37,000 200,000 50,000 Commonstock 150,000 Retained eamings Total Liabilities and Stockholders' Equity 205,000 90,000 P 791.500 P 405.000 After the date of the business combination, the book value of Silk's net a ssets 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 Power 44,000 Silk 30,000 45,000 70,000 Accounts Receivable Inventory Land 110,000 130,000 80,000 500,000 25,000 400,000 Buildings and equipment Less: Accumulated depreciation Investmentin Silk Corporationstock (223,000) 150,500 P 791,500 P 405,000 (165,000) Total Assets Accounts payable Таxes payable Bonds payable 61,500 Р 28,000 95,000 280,000 37,000 200,000 50,000 Commonstock 150,000 Retained eamings Total Liabilities and Stockholders' Equity 205,000 90,000 P 791.500 P 405.000 After the date of the business combination, the book value of Silk's net a ssets 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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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