On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp's common stock forP160,000 cash. The fair value of the non-controlling interest at the date was determinedto be P40,000. Data from the balance sheets of the two companies included thefollowing accounts as of the date of acquisition:• On the date of the business combination, the book values of Vaxx Corp's net assetsand liabilities approximated fair value except for inventory, which has a fair value ofP45,000, and land, which had a fair value of P60,000. (using full goodwill approach). Pfizer Corporation Vaxx CorporationCash60,00020,000Accounts receivable80,00030,000Inventory90,00040,000Land100,00040,000Buildings and equipment200,000150,000Less: Accumulated depreciation(80,000)(50,000)Investment in Vaxx Corp. stock160,000Total Assets610,000230,000Accounts payable110,00030,000Bonds payable95,00040,000Common stock200,00040,000Retained earnings205,000120,000Total Liabilities and Equity610,000230,000What amount of consolidated retained earnings will be reported?

Pfizer Corp acquired 80% share in Vax Corp. So now as per law Pfizer…

Answered: On January 1, 2020, Pfizer Corp.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, 2020, Pfizer Corp. acquired 80% of Vaxx Corp's common stock for P160,000 cash. The fair value of the non-controlling interest at the date was determined to be P40,000. Data from the balance sheets of the two companies included the following accounts as of the date of acquisition: • On the date of the business combination, the book values of Vaxx Corp's net assets and liabilities approximated fair value except for inventory, which has a fair value of P45,000, and land, which had a fair value of P60,000. (using full goodwill approach).

Pfizer Corporation Vaxx Corporation
Cash
60,000
20,000
Accounts receivable
80,000
30,000
Inventory
90,000
40,000
Land
100,000
40,000
Buildings and equipment
200,000
150,000
Less: Accumulated depreciation
(80,000)
(50,000)
Investment in Vaxx Corp. stock
160,000
Total Assets
610,000
230,000
Accounts payable
110,000
30,000
Bonds payable
95,000
40,000
Common stock
200,000
40,000
Retained earnings
205,000
120,000
Total Liabilities and Equity
610,000
230,000
What amount of consolidated retained earnings will be reported?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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