. Winston Corporation purchases all of Harley Company’s stock on June 1 for P1,200,000. At that date, Harley had the following book and market values: Book Value Market Value Cash and Receivables P80,000 P80,000 Inventory 230,000 270,000 Plant Assets (net) 900,000 1,230,000 Cost of Goods Sold 750
1. Winston Corporation purchases all of Harley Company’s stock on June 1 for P1,200,000. At that date, Harley had the following book and market values:
Book Value Market Value
Cash and Receivables P80,000 P80,000
Inventory 230,000 270,000
Plant Assets (net) 900,000 1,230,000
Cost of Goods Sold 750,000
Operating Expenses 170,000
Dividends 20,000
Liabilities 600,000 600,000
Common Stock 25,000
Sales 1,000,000
What amount of retained earnings is eliminated in the acquisition date worksheet elimination?
2. Banana Company purchases 80 percent of Mango. At the date of acquisition, Mango has revenue of P250,000 and expenses of P170,000. What amount of pre-acquisition earnings will be created on the consolidated income statement at the acquisition date?
3. Delta Corporation acquires 70 percent of Bravo Company’s stock. What amount of non-controlling interest is recognized on the acquisition date balance sheet if Telephone has the following account balances?
Book Value Market Value
Cash P10,000 P10,000
Inventory 80,000 80,000
Plant Assets (net) 350,000 350,000
Cost of Goods Sold 130,000
Liabilities (110,000) (110,000)
Common Stock (30,000)
Retained Earnings (260,000)
Sales (190,000)
Please explain step by step with clear conclusion/explanation.
Step by step
Solved in 3 steps with 1 images
