RR Records Inc. acquired all of DD Studios’ voting shares on January 1, 20x1, for P280,000. RR’s balance sheet immediately after the combination contained the following balances: (see image 1) DD’s balance sheet at acquisition contained the following balances: (see image 2) On the date of combination, the inventory held by DD had a fair value of P170,000, and its buildings and recording equipment had a value of P375, 000. Goodwill reported by DD resulted from a purchase of SS Enterprises in 20x1. SS was liquidated and its assets and liabilities were brought onto DD’s books. Compute the balance of Retained Earnings to be reported in the consolidated balance sheet immediately after the acquisition.
RR Records Inc. acquired all of DD Studios’ voting shares on January 1, 20x1, for P280,000. RR’s balance sheet immediately after the combination contained the following balances: (see image 1) DD’s balance sheet at acquisition contained the following balances: (see image 2) On the date of combination, the inventory held by DD had a fair value of P170,000, and its buildings and recording equipment had a value of P375, 000. Goodwill reported by DD resulted from a purchase of SS Enterprises in 20x1. SS was liquidated and its assets and liabilities were brought onto DD’s books. Compute the balance of Retained Earnings to be reported in the consolidated balance sheet immediately after the acquisition.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
RR Records Inc. acquired all of DD Studios’ voting shares on January 1, 20x1, for P280,000. RR’s
Compute the balance of
Transcribed Image Text:Image 1
RR Records, Inc.
Balance Sheet
January 1, 20x4
P120,000 Accounts Payable
110,000 Taxes Payable
70,000 Notes Payable
350,000
280,000 Retained Earnings
P930.000
P 75,000
50,000
Cash and Receivables .
Inventory..
Land.
Buildings and Equipment (net).
Investment in DD stock..
300,000
400,000
Common Stock.
105,000
P930.000
Image 2+
DD Studios
Balance Sheet
January 1, 20x4
P 40,000 Accounts Payable
180,000 Notes Payable.
350,000 Common Stock.
30,000 Additional Paid- in Capital ..
P 90,000
250,000
Cash and Receivables.
Inventory ..
Buildings and Equipment (net).
Goodwill .
100,000
200,000
(40,000)
Retained Earnings.
P600.000
P600.000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education