On January 1, 2021, ABC Co. acquired 80% interest in XYz, Inc. by issuing 5,000 shares with fair value of P30 per share and par value of P20 per share. The financial statements of ABc Co. and XYZ, Inc. immediately after the acquisition are shown below: Jan. 1, 2021 АВС Со. XYZ, Inc. Cash 20,000 10,000 Accounts receivable 60,000 80,000 24,000 46,000 Inventory Investment in subsidiary 150,000 400,000 Equipment 100,000 Accumulated depreciation Total assets (40,000) 670,000 (20,000) 160,000 Accounts payable 40,000 12,000 Bonds payable 60,000 340,000 130,000 100,000 Share capital Share premium Retained earnings Total liabilities and equity 100,000 670,000 48,000 160,000 On January 1, 2021, the fair value of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows: Carrying Fair Fair value XYZ, Inc. increment values 10,000 amounts Cash 10,000 Accounts receivable 24,000 24,000 62,000 Inventory Equipment Accumulated depreciation Accounts payable Net assets 46,000 16,000 100,000 (20,000) (24,000) (12,000) (12,000) 120,000 20,000 (4,000) 148,000 180,000 32,000 The equipment has a remaining useful life as of 4 years from January 1, 2021. ABC Co. elects to measure non-controlling interest as its proportionate share in XYZ's net identifiable assets. Compute for the consolidated asset.
On January 1, 2021, ABC Co. acquired 80% interest in XYz, Inc. by issuing 5,000 shares with fair value of P30 per share and par value of P20 per share. The financial statements of ABc Co. and XYZ, Inc. immediately after the acquisition are shown below: Jan. 1, 2021 АВС Со. XYZ, Inc. Cash 20,000 10,000 Accounts receivable 60,000 80,000 24,000 46,000 Inventory Investment in subsidiary 150,000 400,000 Equipment 100,000 Accumulated depreciation Total assets (40,000) 670,000 (20,000) 160,000 Accounts payable 40,000 12,000 Bonds payable 60,000 340,000 130,000 100,000 Share capital Share premium Retained earnings Total liabilities and equity 100,000 670,000 48,000 160,000 On January 1, 2021, the fair value of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows: Carrying Fair Fair value XYZ, Inc. increment values 10,000 amounts Cash 10,000 Accounts receivable 24,000 24,000 62,000 Inventory Equipment Accumulated depreciation Accounts payable Net assets 46,000 16,000 100,000 (20,000) (24,000) (12,000) (12,000) 120,000 20,000 (4,000) 148,000 180,000 32,000 The equipment has a remaining useful life as of 4 years from January 1, 2021. ABC Co. elects to measure non-controlling interest as its proportionate share in XYZ's net identifiable assets. Compute for the consolidated asset.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 14RE
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Transcribed Image Text:On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P30 per share
and par value of P20 per share. The financial statements of ABC Co. and XYZ, Inc. immediately after the acquisition are
shown below:
Jan. 1, 2021
XYZ, Inc.
10,000
ABC Co.
20,000
60,000
Cash
Accounts receivable
24,000
Inventory
Investment in subsidiary
Equipment
80,000
46,000
150,000
400,000
(40,000)
100,000
Accumulated depreciation
Total assets
(20,000)
160,000
670,000
Accounts payable
40,000
12,000
Bonds payable
60,000
Share capital
340,000
100,000
Share premium
Retained earnings
Total liabilities and equity
130,000
100,000
48,000
670,000
160,000
On January 1, 2021, the fair value of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows:
Carrying
Fair
Fair value
XYZ, Inc.
amounts
values
increment
Cash
10,000
10,000
Accounts receivable
24,000
24,000
Inventory
Equipment
Accumulated depreciation
Accounts payable
46,000
62,000
16,000
100,000
120,000
20,000
(20,000)
(24,000)
(12,000)
(4,000)
(12,000)
Net assets
148,000
180,000
32,000
The equipment has a remaining useful life as of 4 years from January 1, 2021. ABC Co. elects to measure non-controlling
interest as its proportionate share in XYZ's net identifiable assets. Compute for the consolidated asset.
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