4. What is the amount of pre-acquisition earnings on the acquisition date consolidated income statement if the parent acquires 90 percent of the subsidiary's stock and the following income statement accounts exist at the acquisition date? Parent Subsidiary Sales P250,000 P60,000 Cost of Goods Sold 120,000 12,000 Depreciation Expense 10,000 5,000 Operating Expenses 40,000 8,000 Income Tax Expense 32,000 14,000 5. Using the same information in No. 4, what is the imputed value of a subsidiary if the parent pays P56.000 for 80 percent of the subsidiary's stock?

4. What is the amount of pre-acquisition earnings on the acquisition date consolidated income statement if the parent acquires 90 percent of the subsidiary's stock and the following income statement accounts exist at the acquisition date? Parent Subsidiary Sales P250,000 P60,000 Cost of Goods Sold 120,000 12,000 Depreciation Expense 10,000 5,000 Operating Expenses 40,000 8,000 Income Tax Expense 32,000 14,000 5. Using the same information in No. 4, what is the imputed value of a subsidiary if the parent pays P56.000 for 80 percent of the subsidiary's stock?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 30E

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What is the amount of pre-acquisition earnings on the acquisition date consolidated income statement if the parent acquires 90 percent of the subsidiary’s stock and the following income statement accounts exist at the acquisition date? Parent Subsidiary Sales P250,000 P60,000 Cost of Goods Sold 120,000 12,000 Depreciation Expense 10,000 5,000 Operating Expenses 40,000 8,000 Income Tax Expense 32,000 14,000 2. Using the same information in No. 1, what is the imputed value of a subsidiary if the parent pays P56,000 for 80 percent of the subsidiary’s stock? Use the following information for question 3 and 4: Marksman acquired 100 percent of Tribal Transit for P275,000. At the date of acquisition, Fast Transit…
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S acquired 100 percent of F for P275,000. At the date of acquisition, F had the following book and market values: (see image below) What is the amount of the “Investment in F” account on S’s financial records at the acquisition date? What amount of pre-acquisition earnings is eliminated in the acquisition date worksheet elimination? Please answer in good accounting form. Thank you!
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