Requirements:1. Prepare the worksheet for consolidation purposes and the related eliminating entries on January1, 20x9 and December 31, 20x192. How much is the goodwill to be reported on the consolidated balance sheet on January 1, 2x19?3. How much is the Non-controlling interest on January 1, 2x19? On January 5, 20x9, Parent Company acquired 80% of the outstanding shares of Subsidiary Company for P350,000.The financial statements of Parent and Subsidiary Company before the acquisition follow:Subsidiary ParentValueParentCompany Company700,000100,000 100,00055,000365,000Cash300,0001,000,000500,0001,000,000Inventory50,000350,000200,000 200,000200,000100,000PPELiabilitiesOtstanding SharesRetained earnings500,000Financial statements for Parent and Subsidiary for the year ended December 31, 2x19 follow:INCOME AND RETAINED EARNINGSParentSubsidiaryCompany Company800,00040,000(480,000) (250,000)(60,000)300,000500,000(100,000)700,000Sales550,000Dividend incomeCost of salesOperating expensesNet income(150,000)150,000Retained earnings, Jan 1, 2019Dividends declared100,000(50,000)200,000Retained earnings endBALANCE SHEETCash300,000100,000650,000350,000900.000125,00030,00045,000ReceivablesInventoryInvestment in SubsidiaryPPE350,000Total2,300,000550,000Liabilities600,0001,000,000700,0002,300,000150,000200,000200.000550,000Outstanding sharesRetained earningsTotalAdditional Information:The undervalued PPE of Subsidiary on the date of acquisition has a remaining useful life of 5-years.Subsidiary Company owes Parent Company P5,000 on December 31, 2x19.1.2.

1. On 05.01.20x9, Parent company acquired outstanding shares of subsidiary company = 80% interest…

Answered: Requirements: 1. Prepare the worksheet…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Requirements:
1. Prepare the worksheet for consolidation purposes and the related eliminating entries on January
1, 20x9 and December 31, 20x19
2. How much is the goodwill to be reported on the consolidated balance sheet on January 1, 2x19?
3. How much is the Non-controlling interest on January 1, 2x19?

On January 5, 20x9, Parent Company acquired 80% of the outstanding shares of Subsidiary Company for P350,000.
The financial statements of Parent and Subsidiary Company before the acquisition follow:
Subsidiary Parent
Value
Parent
Company Company
700,000
100,000 100,000
55,000
365,000
Cash
300,000
1,000,000
500,000
1,000,000
Inventory
50,000
350,000
200,000 200,000
200,000
100,000
PPE
Liabilities
Otstanding Shares
Retained earnings
500,000
Financial statements for Parent and Subsidiary for the year ended December 31, 2x19 follow:
INCOME AND RETAINED EARNINGS
Parent
Subsidiary
Company Company
800,000
40,000
(480,000) (250,000)
(60,000)
300,000
500,000
(100,000)
700,000
Sales
550,000
Dividend income
Cost of sales
Operating expenses
Net income
(150,000)
150,000
Retained earnings, Jan 1, 2019
Dividends declared
100,000
(50,000)
200,000
Retained earnings end
BALANCE SHEET
Cash
300,000
100,000
650,000
350,000
900.000
125,000
30,000
45,000
Receivables
Inventory
Investment in Subsidiary
PPE
350,000
Total
2,300,000
550,000
Liabilities
600,000
1,000,000
700,000
2,300,000
150,000
200,000
200.000
550,000
Outstanding shares
Retained earnings
Total
Additional Information:
The undervalued PPE of Subsidiary on the date of acquisition has a remaining useful life of 5-years.
Subsidiary Company owes Parent Company P5,000 on December 31, 2x19.
1.
2.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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