Accounting for Business Combination

Consolidation - Date of acquisition

1. The separate statement of financial positions of Pill Corporation and Seed Company on July 1, 20X2 are as follows: Pill Corporation Seed Company Book Values Fair Values Cash P550,000 P10,000 P10,000 Accounts Receivable (net) 700,000 60,000 60,000 Inventories 1,400,000 120,000 140,000 Plant Assets (net) 2,850,000 610,000 690,000 Total Assets P5,500,000 P800,000 Current Liabilities P500,000 P80,000 P80,000 Long-term Debt 1,000,000 400,000 440,000 Common Stock, P10 par 1,500,000 100,000 Additional Paid-In Capital 1,200,000 40,000 Retained Earnings 1,300,000 180,000 Total Liabilities and Equity P5,500,000 800,000 On the same date, Pill Corporation acquired all the shares of Seed Company's outstanding stock by paying P350,000 to its stockholders. Required: Prepare the consolidated statement of financial position on the date of acquisition by showing the consolidation procedures. Tip: Follow the process in the handout