What amount of goodwill will be reported? Power Corporation acquired 70 percent of Silk Corporation's common stock onDecember 31, 20x2. Balance sheet data for the two companies immediatelyfollowing acquisition follow:ItemPowerSilk30,00045,000CashP44,000110,000PAccounts ReceivableInventory130,00080,000500,000(223,000)150,500791,50070,00025,000400,000LandBuildings and equipmentLess: Accumulated depreciationInvestment in Silk Corporation stock(165,000)Total AssetsP405,00061,500Accounts payableTaxes payableBonds payable28,00037,000200,00095,000280,000150,000205,000791,500Common stockRetained earningsTotal Liabilities and Stockholders' Equity P50,00090,000405,000After the date of the business combination, the book value of Silk's net assetsand liabilities approximated their fair value except for inventory, which had afair value of P85,000, and land, which had a fair value of P45, 000. The fair valueof the non-controlling interest was P64,500 on December 31, 20x2.For each of the question below, indicate the appropriate total that should appearin the consolidated balance sheet immediately after the business combinationon the basis of full-goodwill approach:

Consolidated balance sheet The financial position of a combination of two companies is represented…

Answered: What amount of goodwill will be…

Business

Accounting

What amount of goodwill will be reported?

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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Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20x2. Balance sheet datafor the two companies immediately following acquisition follow 4. What amount of investment in Silk will be reported?A. P 0 C. P 150,500B. P 140,000 D. P 215,0005. What amount of liabilities will be reported?A. P265,000 C. P 622,000B. P 436,500 D. P 701,5006. What amount will be reported as non-controlling interest?A. P 42,000 C. P 60,900B. P 52,500 D. P 64,500
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 Silk Cash P44,000 P30,000Accounts Receivable 110,000 45,000Inventory 130,000 70,000Land 80,000 25,000Buildings and equipment 500,000 400,000Less: Accumulated depreciation (223,000) (165,000)Investment in Silk Corporation stock 150,500Total Assets P 791,500 P 405,000 Accounts payable…
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 Silk Cash P44,000 P30,000Accounts Receivable 110,000 45,000Inventory 130,000 70,000Land 80,000 25,000Buildings and equipment 500,000 400,000Less: Accumulated depreciation (223,000) (165,000)Investment in Silk Corporation stock 150,500Total Assets P 791,500 P 405,000 Accounts payable…
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 Silk Cash P44,000 P30,000Accounts Receivable 110,000 45,000Inventory 130,000 70,000Land 80,000 25,000Buildings and equipment 500,000 400,000Less: Accumulated depreciation (223,000) (165,000)Investment in Silk Corporation stock 150,500Total Assets P 791,500 P 405,000 Accounts payable…
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 Silk Cash P44,000 P30,000Accounts Receivable 110,000 45,000Inventory 130,000 70,000Land 80,000 25,000Buildings and equipment 500,000 400,000Less: Accumulated depreciation (223,000) (165,000)Investment in Silk Corporation stock 150,500Total Assets P 791,500 P 405,000 Accounts payable…
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