AC Accounting Principl... * Course Hero CONSOLIDATED FINANCIAL STATEMENTS - AT DATE OF ACQUISITION PROBLEMS 1. PARENT COMPANY purchased 75% of the voting common stock of SUBSIDIARY COMPANY On January 1, 2021 for P2,500,000 and issuing 1,000 of their voting shares. On this date the shares of PARENT and SUBSIDIARY were trading at P50 and P15 each respectively. On this date before the combination, the book and fair values of PARENT and SUBSIDIARY were as follows: PARENT SUBSIDIARY SUBSIDIARY COMPANY COMPANY COMPANY BOOK VALUE BOOK VALUE FAIR VALUE Cash 3,000,000 75,000 75,000 Receivables 800,000 200,000 200,000 Inventories 1,200,000 450,000 500,000 Other current assets 800,000 150,000 175,000 Land 3,000,000 750,000 1,200,000 Building-net 6,000,000 1,250,000 1,000,000 Equipment-net 3,500,000 300,000 275,000 Total 18,300,000 3,175,000 Accounts payable 500,000 100,000 100,000 Other liabilities 2,000,000 75,000 70,000 Share capital, P10 15,000,000 2,500,000 Retained earnings 800,000 500,000 ADV 2: CONSOLIDATION OF FINANCIAL STATEMENTS Page 3 Total 18,300,000 3,175,000 The 25% non-controlling interest is to be stated at fair value. PARENT also paid P25,000 for direct costs related to the business combination. Determine the following balances that would appear in the consolidated financial statements of PARENT COMPANY and its 75% owned subsidiary: 1. Current Assets 2. Non-current Assets 3. Total Liabilities . Stockholders' Equity