On December 31, Year 1, P Company purchased 80% of the outstanding shares of S Company for $7,840 cash. The statements of financial position of the two companies immediately after the acquisition transaction appear below P Company S Company Carrying Carrying Amount Amount $ 9,200 7,840 6,260 Plant and equipment (net) Investment in 5 Company Inventory Accounts receivable Cash Ordinary shares Retained earnings Long-term liabilities Other current liabilities Accounts payable 5,350 3,700 $ 32,350 $ 11,600 14,150 4,000 1,100 1,500 $32,350 $ 8,100 $ 6,800 5,000 2,900 2,150 $ 18,150 Fair Value $4,100 6,250 3,100 2,900 1,800 $ 18,150 5,600 2,900 2,150 3,100 2,900 1,800
On December 31, Year 1, P Company purchased 80% of the outstanding shares of S Company for $7,840 cash. The statements of financial position of the two companies immediately after the acquisition transaction appear below P Company S Company Carrying Carrying Amount Amount $ 9,200 7,840 6,260 Plant and equipment (net) Investment in 5 Company Inventory Accounts receivable Cash Ordinary shares Retained earnings Long-term liabilities Other current liabilities Accounts payable 5,350 3,700 $ 32,350 $ 11,600 14,150 4,000 1,100 1,500 $32,350 $ 8,100 $ 6,800 5,000 2,900 2,150 $ 18,150 Fair Value $4,100 6,250 3,100 2,900 1,800 $ 18,150 5,600 2,900 2,150 3,100 2,900 1,800
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter14: Intercorporate Investments In Common Stock
Section: Chapter Questions
Problem 16E
Related questions
Question
(a) Prepare a consolidated statement of financial position in order of liquidity ie starting with cash at the date of acquisition under each of the following: (i) Identifiable net assets method
Transcribed Image Text:On December 31, Year 1, P Company purchased 80% of the outstanding shares of S Company for $7,840 cash.
The statements of financial position of the two companies immediately after the acquisition transaction appear below.
Plant and equipment (net)
Investment in S Company
Inventory
Accounts receivable
Cash
Ordinary shares
Retained earnings
Long-term liabilities
Other current liabilities
Accounts payable
P Company
Carrying
Amount
$ 9,200
7,840
6,260
5,350
3,700
$ 32,350
$ 11,600
14,150
4,000
1,100
1,500
$32,350
S Company
Carrying
Amount
$ 8,100
5,000
2,900
2,150
$ 18,150
$ 4,100
6,250
3,100
2,900
1,800
$ 18,150
Fair
Value
$ 6,800
5,600
2,900
2,150
3,100
2,900
1,800
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning