Prepare the consolidated statement of financial position on the date of acquisition by showing the consolidation procedures. Tip: Follow the process in the handout.
- The separate statement of financial positions of Pill Corporation and Seed Company on July 1, 20X2 are as follows:
|
|
Pill Corporation |
Seed Company |
|
|
|
|
Book Values |
Fair Values |
|
Cash |
P550,000 |
P10,000 |
P10,000 |
|
|
700,000 |
60,000 |
60,000 |
|
Inventories |
1,400,000 |
120,000 |
140,000 |
|
Plant Assets (net) |
2,850,000 |
610,000 |
690,000 |
|
Total Assets |
P5,500,000 |
P800,000 |
|
|
|
|
|
|
|
Current Liabilities |
P500,000 |
P80,000 |
P80,000 |
|
Long-term Debt |
1,000,000 |
400,000 |
440,000 |
|
Common Stock, P10 par |
1,500,000 |
100,000 |
|
|
Additional Paid-In Capital |
1,200,000 |
40,000 |
|
|
|
1,300,000 |
180,000 |
|
|
Total Liabilities and Equity |
P5,500,000 |
800,000 |
|
On the same date, Pill Corporation acquired all the shares of Seed Company’s outstanding stock by paying P350,000 to its stockholders.
Required: Prepare the consolidated statement of financial position on the date of acquisition by showing the consolidation procedures. Tip: Follow the process in the handout.
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