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Prepare the set of consolidated financial statement of financial position on the date of acquisition by showing the consolidation procedures.

Prepare the set of consolidated financial statement of financial position on the date of acquisition by showing the consolidation procedures.

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...
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Prepare the set of consolidated financial statement of financial position on the date of acquisition by showing the consolidation procedures.

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 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 Cash Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation P210,000 420,000 400,000 500,000 505,000 P2.035,000 Total Assets 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 P55,000 150,000 130,000 500,000 300,000 P1,135,000 Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets Accounts Payable Bonds Payable Common Stock, P2 par value Additional Paid-In Capital Retained Eamings Total Liabilities and Equity P160,000 250,000 40,000 160,000 120,000 P730,000 P160,000 250,000
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 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 Cash Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation P210,000 420,000 400,000 500,000 505,000 P2.035,000 Total Assets 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 P55,000 150,000 130,000 500,000 300,000 P1,135,000 Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets Accounts Payable Bonds Payable Common Stock, P2 par value Additional Paid-In Capital Retained Eamings Total Liabilities and Equity P160,000 250,000 40,000 160,000 120,000 P730,000 P160,000 250,000
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