Make all elimination journal entries to facilitate the consolidation. 3Assume that AAA Co. plans to acquire XYZ Co. As its subsidiary on April 30, 2022.Below are the statements of financial position of the two companies before the acquisition is made:4AAA Co. and XYZ Co.Statement of financial positionApril 30, 2022.78910AAА Со.XYZ Co.11Assets12Current Assets13Cash725,300250,12514Trade Receivables1,200,100650,37515InventoryPrepayments850,500711,00015,0001,626,50016120,00017Total Curret Assets2,895,90018Non-current Assets19Equipment (net)1,950,000639,25020Other Assets210,0002,160,000150,00021Total Non-current Assets789,25023Total Assets5,055,9002,415,7502425Liabilities and Equity26Liabilities27Current Liabilities28Trade Payables911,000305,620Loan Payable - current portion250,0001,161,0002930Total Current Liabilities305,62031Non-Current Liability32Loan Payable -non-current portion750,00033Total Non-current Liabilities750,00035Total Liabilities1,911,000305,62036Equity3738Common Stock2,000,0001,500,000Additional Paid-in CapitalRetained EarningsTotal Equity39800,000450,000160,1302,110,13040344,900413,144,900Total Liabilities and Equity5,055,9002,415,7504344

In case of Consolidation of the Companies, the Parent company needs to make following entries:…

Assume that AAA Co. plans to acquire XYZ Co. As its subsidiary on April 30, 2022. Below are the statements of financial position of the two companies before the acquisition is made: 4 AAA Co. and XYZ Co. Statement of financial position April 30, 2022. 10 АAА Со. XYZ Co. 11 Assets 12 Current Assets 13 Cash 725,300 250,125 14 Trade Receivables 1,200, 100 650,375 711,000 15,000 1,626,500 15 Inventory Prepayments 850,500 120,000 2,895,900 16 17 Total Current Assets 18 Non-current Assets 19 639,250 Equipment (net) Other Assets 1,950,000 20 210,000 150,000 21 Total Non-current Assets 2,160,000 789,250 23 Total Assets 5,055,900 2,415,750 24 25 Liabilities and Equity 26 Liabilities 27 Current Liabilities Trade Payables Loan Payable -current portion 28 911,000 305,620 29 250,000 1,161,000 30 Total Current Liabilities 305,620 Non-Current Liability Loan Payable -non-current portion 31 32 750,000 33 Total Non-current Liabilities 750,000 1,911,000 305,620 35 Total Liabilities 36 37 Equity 38 Common Stock 2,000,000 1,500,000 39 Additional Paid-in Capital 800,000 450,000 40 Retained Earnings 160,130 2,110,130 344,900 Total Equity 3,144,900 41 43 Total Liabilities and Equity 5,055,900 2,415,750

Assume that AAA Co. plans to acquire XYZ Co. As its subsidiary on April 30, 2022. Below are the statements of financial position of the two companies before the acquisition is made: 4 AAA Co. and XYZ Co. Statement of financial position April 30, 2022. 10 АAА Со. XYZ Co. 11 Assets 12 Current Assets 13 Cash 725,300 250,125 14 Trade Receivables 1,200, 100 650,375 711,000 15,000 1,626,500 15 Inventory Prepayments 850,500 120,000 2,895,900 16 17 Total Current Assets 18 Non-current Assets 19 639,250 Equipment (net) Other Assets 1,950,000 20 210,000 150,000 21 Total Non-current Assets 2,160,000 789,250 23 Total Assets 5,055,900 2,415,750 24 25 Liabilities and Equity 26 Liabilities 27 Current Liabilities Trade Payables Loan Payable -current portion 28 911,000 305,620 29 250,000 1,161,000 30 Total Current Liabilities 305,620 Non-Current Liability Loan Payable -non-current portion 31 32 750,000 33 Total Non-current Liabilities 750,000 1,911,000 305,620 35 Total Liabilities 36 37 Equity 38 Common Stock 2,000,000 1,500,000 39 Additional Paid-in Capital 800,000 450,000 40 Retained Earnings 160,130 2,110,130 344,900 Total Equity 3,144,900 41 43 Total Liabilities and Equity 5,055,900 2,415,750

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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