Homework Help is Here – Start Your Trial Now!
Business
Accounting
On January 1, 20X2, Parent Inc. issued 32,000 shares of its P10 par value common stock for all the outstanding shares of Son Company. The fair value of Parent Inc.'s stock is P25 per share. Parent Inc. pays P50,000 in registering the stocks. Given below are the statements of financial position (SFP) of the companies before the acquisition: Parent Inc. Statement of Financial Position January 1, 20X2 Assets Liabilities and Equity Cash Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets P200,000 Accounts Payable 185,000 Bonds Payable 190,000 Common Stock, P10 par value 300,000 Additional Paid-In Capital (APIC) 740,000 Retained Earnings 420,000 Total Liabilities and Equity P2,035,000 P210,000 420,000 400,000 500,000 505,000 P2,035,000 Son Company Statement of Financial Position January 1, 20X2 Book Value Fair Value P55,000 130,000 85,000 320,000 140,000 P730,000 Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets P55,000 150,000 130,000 500,000 300,000 P1,135,000 Accounts Payable Bonds Payable Common Stock, P2 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equity P160,000 250,000 40,000 160,000 120,000 P730,000 P160,000 250,000 Required: Prepare the consolidated statement of financial position on the date of acquisition by showing the consolidation procedures. Tip: Follow the process in the handout.

On January 1, 20X2, Parent Inc. issued 32,000 shares of its P10 par value common stock for all the outstanding shares of Son Company. The fair value of Parent Inc.'s stock is P25 per share. Parent Inc. pays P50,000 in registering the stocks. Given below are the statements of financial position (SFP) of the companies before the acquisition: Parent Inc. Statement of Financial Position January 1, 20X2 Assets Liabilities and Equity Cash Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets P200,000 Accounts Payable 185,000 Bonds Payable 190,000 Common Stock, P10 par value 300,000 Additional Paid-In Capital (APIC) 740,000 Retained Earnings 420,000 Total Liabilities and Equity P2,035,000 P210,000 420,000 400,000 500,000 505,000 P2,035,000 Son Company Statement of Financial Position January 1, 20X2 Book Value Fair Value P55,000 130,000 85,000 320,000 140,000 P730,000 Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets P55,000 150,000 130,000 500,000 300,000 P1,135,000 Accounts Payable Bonds Payable Common Stock, P2 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equity P160,000 250,000 40,000 160,000 120,000 P730,000 P160,000 250,000 Required: Prepare the consolidated statement of financial position on the date of acquisition by showing the consolidation procedures. Tip: Follow the process in the handout.

Intermediate Accounting: Reporting And Analysis
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
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 5MC: Kent Corporation was organized on January 1, 2014. On that date, it issued 200,000 shares of 10 par...
See similar textbooks
icon
Related questions
Question
On January 1, 20X2, Parent Inc. issued 32,000 shares of its P10 par value common stock for all the outstanding shares of Son Company. The fair value of Parent Inc.'s stock is P25 per share. Parent Inc. pays P50,000 in registering the stocks. Given below are the statements of financial position (SFP) of the companies before the acquisition: Parent Inc. Statement of Financial Position January 1, 20X2 Assets Liabilities and Equity P210,000 420,000 400,000 500,000 505,000 P2,035,000 Cash P200,000 Accounts Payable 185,000 Bonds Payable 190,000 Common Stock, P10 par value 300,000 Additional Paid-In Capital (APIC) 740,000 Retained Earnings 420,000 Total Liabilities and Equity P2,035,000 Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets Son Company Statement of Financial Position January 1, 20X2 Book Value Fair Value P55,000 150,000 130,000 500,000 300,000 P1,135,000 Accounts Receivable Inventory Land P55,000 130,000 85,000 320,000 140,000 P730,000 Building, net of depreciation Equipment, net of depreciation Total Assets P160,000 250,000 Accounts Payable Bonds Payable Common Stock, P2 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equity P160.000 250,000 40,000 160,000 120,000 P730,000 Required: Prepare the consolidated statement of financial position on the date of acquisition by showing the consolidation procedures. Tip: Follow the process in the handout.
Transcribed Image Text:On January 1, 20X2, Parent Inc. issued 32,000 shares of its P10 par value common stock for all the outstanding shares of Son Company. The fair value of Parent Inc.'s stock is P25 per share. Parent Inc. pays P50,000 in registering the stocks. Given below are the statements of financial position (SFP) of the companies before the acquisition: Parent Inc. Statement of Financial Position January 1, 20X2 Assets Liabilities and Equity P210,000 420,000 400,000 500,000 505,000 P2,035,000 Cash P200,000 Accounts Payable 185,000 Bonds Payable 190,000 Common Stock, P10 par value 300,000 Additional Paid-In Capital (APIC) 740,000 Retained Earnings 420,000 Total Liabilities and Equity P2,035,000 Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets Son Company Statement of Financial Position January 1, 20X2 Book Value Fair Value P55,000 150,000 130,000 500,000 300,000 P1,135,000 Accounts Receivable Inventory Land P55,000 130,000 85,000 320,000 140,000 P730,000 Building, net of depreciation Equipment, net of depreciation Total Assets P160,000 250,000 Accounts Payable Bonds Payable Common Stock, P2 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equity P160.000 250,000 40,000 160,000 120,000 P730,000 Required: Prepare the consolidated statement of financial position on the date of acquisition by showing the consolidation procedures. Tip: Follow the process in the handout.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Consolidations
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.
Similar questions
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS