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 Accounts Receivable 110,000 130,000 45,000 70,000 Inventory 25,000 400,000 Land 80,000 Buildings and equipment Less: Accumulated depreciation Investmentin Silk Corporationstock Total Assets 500,000 (223,000) 150,500 P 791,500 P 405,000 (165,000) Accounts payable Тахes payable Bonds payable Common stock Retained eamings Total Liabilities and Stockholders' Equity 61,500 P 95,000 280,000 150,000 205,000 P 791,500 P 405,000 28,000 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 PS85,000, 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 Accounts Receivable 110,000 130,000 45,000 70,000 Inventory 25,000 400,000 Land 80,000 Buildings and equipment Less: Accumulated depreciation Investmentin Silk Corporationstock Total Assets 500,000 (223,000) 150,500 P 791,500 P 405,000 (165,000) Accounts payable Тахes payable Bonds payable Common stock Retained eamings Total Liabilities and Stockholders' Equity 61,500 P 95,000 280,000 150,000 205,000 P 791,500 P 405,000 28,000 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 PS85,000, 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.

Name: After the business combination on the basis of full-goodwill approach,
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Description: After the business combination on the basis of full-goodwill approach, what amount of inventory will be reported?a. P179,000b. P200,000c. P210,500d. P215,000 Power Corporation acquired 70 percent of Silk Corporation's common stock on December 31, 20x

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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