Business Combination

1. PARPAN Company acquires 100% of SOMBILON Company's common stock for P165,000 in cash on December 1, 2020. The net asset of SOMBILON Company is as follows: Common Stock P75,000 Share Premium 45,000 Retained Earnings 30,000 Net Asset/Equity P150,000 CONDENSED FINANCIAL STATEMENT Parent Subsidiary Cash 180,000 0 Accounts Rec. 60,000 48,000 Inventory 75,000 30,000 PPE 270,000 237,000 Goodwill Investment in Subsidiary 165,000 Total Assets 750,000 315,000 Accounts Pay. 420,000 165,000 Common staal OAccounts Pay. 420,000 165,000 Common stock Parent 150,000 Subsidiary 75,000 Share premium Parent 120,000 Subsidiary 45,000 Retained earnings Parent 60,000 Subsidiary 30,000 Total L & Equity 750,000 315,000 Prepare the following: 1. Entry to record the acquisition. 2. Working paper elimination entries 3. Consolidated working paper 2. On January 1, 2019, P Corporation acquires all the common stock of 3 Company for P300,000. At that time, S Company has P200,000 of common stock outstanding and retained earnings of P100,000. On December 31, 2019, 8 Company reported the following results of its operations: N91\" inrnmp D50 nnn 4 Q I 2. On January 1, 2019, P Corporation acquires all the common stock of 8 Company for P300,000. At that time, S Company has P200,000 of common stock outstanding and retained earnings of P100,000. On December 31, 2019, S Company reported the following results of its operations: Net income P50,000 Dividends paid 30,000 Required: 1. Prepare journal entries to record the transactions. 2. Prepare working paper elimination entries. 3. Papa Corporation owns 75% of the outstanding stock of San Company, acquired at book value during 2018. Selected information from the accounts of Papa and San for 2020 are as follows: Sales Cost of goods sold During 2020, Papa sold merchandise to San for 4 Q I 3. Papa Corporation owns 75% of the outstanding stock of San Company, acquired at book value during 2018. Selected information from the accounts of Papa and San for 2020 are as follows: Papa San Cost of goods sold 490,000 190,000 During 2020, Papa sold merchandise to San for P50,000 at a gross prot of P20,000. Half of this merchandise remained in San's inventory at December 31, 2020. San's December 31, 2019 inventory included unrealized prot of P4,000 on goods acquired from Papa. What is the consolidated sales and cost of sales for 2020? 4. Susan Company, a partially owned (90%) subsidiary of Peter Company, sold equipment on Ian.1, 20X1 to Peter for P200,000. The equipment had a net book value of P140,000 (cost of P180,000 and accumulated depreciation of P40,000), and a remaining life of ten years. Required: 1. Prepare journal entry to record the transactions on both Peter and Susan books. 2. Prepare working paper elimination entries. 4