tely after the acquisition are shown below: Jan. 1, 2019 GRANGER Co. HISTORIA, Inc. Cash 20,000 10,000 Accounts receivable 60,000 24,000 Inventory 80,000 46,000 Investment in subsidiary 150,000 Equipment 400,000
On January 1, 2019, GRANGER Co. acquired 80% interest in HISTORIA, Inc. by issuing 5,000 shares with fair value of P30 per share and par value of P20 per share. The financial statements of GRANGER Co. and HISTORIA, Inc. immediately after the acquisition are shown below:
|
|
Jan. 1, 2019 |
|
|
|
GRANGER Co. |
HISTORIA, Inc. |
|
Cash |
20,000 |
10,000 |
|
|
60,000 |
24,000 |
|
Inventory |
80,000 |
46,000 |
|
Investment in subsidiary |
150,000 |
|
|
Equipment |
400,000 |
100,000 |
|
|
(40,000) |
(20,000) |
|
Total assets |
670,000 |
160,000 |
|
|
|
|
|
Accounts payable |
40,000 |
12,000 |
|
Bonds payable |
60,000 |
- |
|
Share capital |
340,000 |
100,000 |
|
Share premium |
130,000 |
- |
|
|
100,000 |
48,000 |
|
Total liabilities and equity |
670,000 |
160,000 |
On January 1, 2019, the fair value of the assets and liabilities of HISTORIA, Inc. were determined by appraisal, as follows:
|
HISTORIA, Inc. |
Carrying amounts |
Fair values |
Fair value increment |
|
Cash |
10,000 |
10,000 |
- |
|
Accounts receivable |
24,000 |
24,000 |
- |
|
Inventory |
46,000 |
62,000 |
16,000 |
|
Equipment |
100,000 |
120,000 |
20,000 |
|
Accumulated depreciation |
(20,000) |
(24,000) |
(4,000) |
|
Accounts payable |
(12,000) |
(12,000) |
- |
|
Net assets |
148,000 |
180,000 |
32,000 |
The equipment has a remaining useful life as of 4 years from January 1, 2019.
Requirement: Prepare the consolidated
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