7. The trial balance of Davao Corporation at the end of its operation for 2014 is given below: DAVAO CORPORATION TRIAL BALANCE December 31, 2017 P 180,000 450,000 Cash Accounts Receivable Estimated Uncollectible Accounts Inventory, January 1 Investment in Available for Sale Pepsico Shares Land Building Accumulated Depreciation, Building Furniture & Equipment Accumulated Depreciation, Furniture & Equipment Accounts Payable Ten-Year Mortgage Payable (18% payable P25,000 every January 1) 12% Preference Share Capital, par P100 Ordinary Share Capital - par P100 Share Premium - Ordinary Unrealized Gain on Revaluation of Land Treasury Shares- Ordinary, 100 shares Retained Earnings Sales Sales Discounts Purchases Purchase Discounts P 23,000 220,000 200,000 800,000 350,000 35,000 210,000 42,000 380,000 250,000 400,000 800,000 80,000 20,000 150,000 -303,800 3,800,000 94,000 3,446,000 171,200 Freight-In Office Salaries Sales Salaries 24,000 36,000 72,000

7. The trial balance of Davao Corporation at the end of its operation for 2014 is given below: DAVAO CORPORATION TRIAL BALANCE December 31, 2017 P 180,000 450,000 Cash Accounts Receivable Estimated Uncollectible Accounts Inventory, January 1 Investment in Available for Sale Pepsico Shares Land Building Accumulated Depreciation, Building Furniture & Equipment Accumulated Depreciation, Furniture & Equipment Accounts Payable Ten-Year Mortgage Payable (18% payable P25,000 every January 1) 12% Preference Share Capital, par P100 Ordinary Share Capital - par P100 Share Premium - Ordinary Unrealized Gain on Revaluation of Land Treasury Shares- Ordinary, 100 shares Retained Earnings Sales Sales Discounts Purchases Purchase Discounts P 23,000 220,000 200,000 800,000 350,000 35,000 210,000 42,000 380,000 250,000 400,000 800,000 80,000 20,000 150,000 -303,800 3,800,000 94,000 3,446,000 171,200 Freight-In Office Salaries Sales Salaries 24,000 36,000 72,000

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.23E: Unusual income statement items Assume that the amount of each of the following items is material to...

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1. On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets andliabilities of Ana Company. Sara issued P400 in long-term liabilities and 40 shares of common stockhaving a par value of P1 per share but a fair value of P10 per share. Sara paid P20 to lawyers,accountants and brokers for assistance in bringing about this purchase. Another P15 was paid inconnection with stock issuance costs. Prior to these transactions, the balance sheets for the twocompanies were as follows: Sara AnaCash P180 P 40Accounts receivable 810 180Inventory 1,080 280Land 600 360Buildings (net) 1,260 440Equipment (net) 480 100Accounts Payable ( 450) ( 80)Long-term liabilities (1,290) (400)Common stock, P1 par (330)Common stock, P20 par (240)Additional paid-in capital (1,080) (340)Retained earnings (1,260) (340)In Sara’s appraisal of Ana, three assets were deemed to be undervalued in the books of Ana: Inventoryby P10, Land by P40 and Buildings by P60.2. Compute the amount of…
1. On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets andliabilities of Ana Company. Sara issued P400 in long-term liabilities and 40 shares of common stockhaving a par value of P1 per share but a fair value of P10 per share. Sara paid P20 to lawyers,accountants and brokers for assistance in bringing about this purchase. Another P15 was paid inconnection with stock issuance costs. Prior to these transactions, the balance sheets for the twocompanies were as follows: Sara AnaCash P180 P 40Accounts receivable 810 180Inventory 1,080 280Land 600 360Buildings (net) 1,260 440Equipment (net) 480 100Accounts Payable ( 450) ( 80)Long-term liabilities (1,290) (400)Common stock, P1 par (330)Common stock, P20 par (240)Additional paid-in capital (1,080) (340)Retained earnings (1,260) (340)In Sara’s appraisal of Ana, three assets were deemed to be undervalued in the books of Ana: Inventoryby P10, Land by P40 and Buildings by P60.1. If the transaction is…
On March 1, 2015, Penson Enterprises purchases an 80% interest in Express Corporation for $320,000 cash. Express Corporation has the following balance sheet on February 28, 2015: (attached)Penson Enterprises receives an independent appraisal on the fair values of Express Corporation’s assets and liabilities. The controller has reviewed the following figures and accepts them as reasonable:Accounts receivable . . . . . . . . . . $ 60,000Inventory . . . . . . . . . . . . . . . . . . . 100,000Land. . . . . . . . . . . . . . . . . . . . . . . 50,000Buildings . . . . . . . . . . . . . . . . . . . 200,000Equipment . . . . . . . . . . . . . . . . . . 162,000Current liabilities . . . . . . . . . . . . . 50,000Bonds payable . . . . . . . . . . . . . . 95,0001. Record the investment in Express Corporation.2. Prepare the value analysis schedule and the determination and distribution of excess schedule.3. Prepare the elimination entries that would be made on a consolidated worksheet prepared on the…