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Compute for consolidated total asset on December 31, 2021 On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares

Compute for consolidated total asset on December 31, 2021


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On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of $60 per share and par value of $40 per share. XYZ's shareholders' equity as of January 1, 2021 comprises the following: Share capital (at carrying amounts) 292,000 Total liabilities 120,000 680,000 Share capital 200,000 Share premium 260,000 200,000 Retained 440,000 Retained earnings Total equity 96,000 296,000 earnings 176,000 1,380,000 Total equity 376,000 On January 1, 2021, the fair values of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows: TOTAL LIABILITIES 1,672,000 496,000 Carrying XYZ, Inc. amounts Fair values Fair value increment AND EQUITY Cash 20,000 20,000 Accounts receivable 48,000 48,000 Statements of profit or loss For the year ended December 31, 2021 Inventory 92,000 124,000 32,000 ABC Co. Equipment 200,000 240,000 40,000 Sales 1,200,000 Accumulated Cost of goods sold (660,000) XYZ, Inc. 480,000 (288,000) (40,000) (48,000) (8,000) depreciation Gross profit 540,000 192,000 Accounts payable (24,000) (24,000) Depreciation expense (160,000) (40,000) Net assets 296,000 360,000 64,000 Distribution costs (128,000) (72,000) Interest expense (12,000) Profit for the year 240,000 80,000 The remaining useful life of the equipment is 4 years. During 2021, no dividends were declared by either ABC or XYZ. There were also no inter-company transactions. The group determined that goodwill is impaired by #4,000. ABC's and XYZ's individual financial statements at year-end are shown below: Statements of financial position As at December 31, 2021 On acquisition date, ABC Co. elected to measure non-controlling interest as its proportionate share in XYZ, Inc.'s net identifiable assets. ABC Co. XYZ, Inc. ASSETS Cash 92,000 228,000 Accounts 300,000 88,000 receivable Inventory 420,000 60,000 Investment in 300,000 subsidiary Equipment 800,000 200,000 Accumulated (240,000) (80,000) depreciation TOTAL ASSETS 1,672,000 496,000

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