Homework Help is Here – Start Your Trial Now!
Business
Accounting
P. assets nt and equipment 34,600 12,000 46,600 abilities of $0,5 each ings 10,000 25,400 35.400

P. assets nt and equipment 34,600 12,000 46,600 abilities of $0,5 each ings 10,000 25,400 35.400

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
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8MC
See similar textbooks
icon
Related questions
Question
On I January 2021, P acquired 80% of the cquity share capital of S in a share exchange of one shares in P for two shares in S. At the date of acquisition shares in P had a market value of $4 cach and S had $2 cach. P will also pay in cash amount of $2,420 after two years. P has a cost of capital of 10% per annum. The issue of shares and cash consideration have not yet been recorded by P. Below are the summarised draft financial statements of both companies. Statements of financial position as at 30 June 2021: P. S Assets Non-current assets Property, plant and equipment Current assets 34,600 12,000 46,600 12,600 6,600 Total assets 19,200 Equity and liabilities Equity share of $0,5 cach Retained earnings Total equity For your 10,000 25,400 35,400 4,000 7,500 11,500 Non-current liabilities: 10% loan notes Current liabilities Total equity and liabilities 5,000 6,200 46,600 3,000 4,700 19,200 The following information is relevant: (i) Assume, except where indicated otherwise, that all items of income and expenditure accrue evenly throughout the year. S carned a LOSS of $2,600 in the year ended 31 December 2021. No dividends were paid by S. (ii) After acquisition date, S transferred a property to P for $15,000. The asset had a remaining useful life of 3 years at the date of transfer. It had carrying amount of $13,920 in the books of S at the date of transfer. (iii) Qazaq has a policy of accounting for any non-controlling interest at fair value. The fair value of the non-controlling interest at the acquisition date was $5,900. (iv) Consolidated goodwill was impaired by $1,000 at 30 June 2021. (v) Included in P's receivables is $5,000 relating to inventory sold to S during the year. S raised a cheque for $3,500 and sent it to P on 29 June 2021. P did not receive this cheque until 4 July 2021 Required: Prepare the consolidated statement of financial position for P as at 30 June 2021.
Transcribed Image Text:On I January 2021, P acquired 80% of the cquity share capital of S in a share exchange of one shares in P for two shares in S. At the date of acquisition shares in P had a market value of $4 cach and S had $2 cach. P will also pay in cash amount of $2,420 after two years. P has a cost of capital of 10% per annum. The issue of shares and cash consideration have not yet been recorded by P. Below are the summarised draft financial statements of both companies. Statements of financial position as at 30 June 2021: P. S Assets Non-current assets Property, plant and equipment Current assets 34,600 12,000 46,600 12,600 6,600 Total assets 19,200 Equity and liabilities Equity share of $0,5 cach Retained earnings Total equity For your 10,000 25,400 35,400 4,000 7,500 11,500 Non-current liabilities: 10% loan notes Current liabilities Total equity and liabilities 5,000 6,200 46,600 3,000 4,700 19,200 The following information is relevant: (i) Assume, except where indicated otherwise, that all items of income and expenditure accrue evenly throughout the year. S carned a LOSS of $2,600 in the year ended 31 December 2021. No dividends were paid by S. (ii) After acquisition date, S transferred a property to P for $15,000. The asset had a remaining useful life of 3 years at the date of transfer. It had carrying amount of $13,920 in the books of S at the date of transfer. (iii) Qazaq has a policy of accounting for any non-controlling interest at fair value. The fair value of the non-controlling interest at the acquisition date was $5,900. (iv) Consolidated goodwill was impaired by $1,000 at 30 June 2021. (v) Included in P's receivables is $5,000 relating to inventory sold to S during the year. S raised a cheque for $3,500 and sent it to P on 29 June 2021. P did not receive this cheque until 4 July 2021 Required: Prepare the consolidated statement of financial position for P as at 30 June 2021.
Expert Solution
steps

Step by step

Solved in 2 steps with 3 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Accounting for Financial Instruments
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
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
SWFT Corp Partner Estates Trusts
SWFT Corp Partner Estates Trusts
Accounting
ISBN:
9780357161548
Author:
Raabe
Publisher:
Cengage
Financial Accounting
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
SWFT Comprehensive Vol 2020
SWFT Comprehensive Vol 2020
Accounting
ISBN:
9780357391723
Author:
Maloney
Publisher:
Cengage
SEE MORE TEXTBOOKS