ush and by issuing its own shares with a fair value of P1,350,000. Parent acquired si hs, Parent purchases another 60% of Subsidiary's ordinary shares for a cash paymen ying value of P6,480,000 and fair value of P11,520,000 and it has liabilities with a E ion date, net loss reported by Subsidiary for the four-month ended amounted to P9C on-controlling interest is valued using the proportionate basis. Parent also paid the fe
ush and by issuing its own shares with a fair value of P1,350,000. Parent acquired si hs, Parent purchases another 60% of Subsidiary's ordinary shares for a cash paymen ying value of P6,480,000 and fair value of P11,520,000 and it has liabilities with a E ion date, net loss reported by Subsidiary for the four-month ended amounted to P9C on-controlling interest is valued using the proportionate basis. Parent also paid the fe
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 19E
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Transcribed Image Text:Parent Company's stockholders' equity as of December 31, 2020 is P7,308,000. On January 1, 2021, Parent acquires 30% of Subsidiary Company's ordinary shares
for P540,000 cash and by issuing its own shares with a fair value of P1,350,000. Parent acquired significant influence over Subsidiary as a result of stock acquisition.
After four months, Parent purchases another 60% of Subsidiary's ordinary shares for a cash payment of P3,942,000. On this date, Subsidiary reports identifiable net
assets with carrying value of P6,480,000 and fair value of P11,520,000 and it has liabilities with a book value and fair value of P3,240,000.
At the acquisition date, net loss reported by Subsidiary for the four-month ended amounted to P900,000. The fair value of the 10% non-controlling interest is
P1,296,000. Non-controlling interest is valued using the proportionate basis. Parent also paid the following: P90,000 for legal fees, P72,000 for finder's fees,
P77,400 for accountant's fees, P64,800 for audit fee and P19,800 for printing of stock certificates.
Immediately after the business combination, how much is the consolidated total equity?
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