On January 1, 2017, Sparky Co. acquired 80% of the outstanding stock of Panda Co. for P225,000 cash. Relevant information for Panda Co. on this date is as follows: Inventory 120,000 Land 240,000 Goodwill 10,000 Liabilities 30,000 Common Stock, P100 par 240,000 Retained earnings 100,000 At acquisition date, the book values of Panda Co.’s net identifiable assets and liabilities approximated their fair values.

On January 1, 2017, Sparky Co. acquired 80% of the outstanding stock of Panda Co. for P225,000 cash. Relevant information for Panda Co. on this date is as follows: Inventory 120,000 Land 240,000 Goodwill 10,000 Liabilities 30,000 Common Stock, P100 par 240,000 Retained earnings 100,000 At acquisition date, the book values of Panda Co.’s net identifiable assets and liabilities approximated their fair values.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

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