Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Example 6: Consolidated financial statements-2 years-Cost Method On January 1, 2007, P Company purchased 90% of the outstanding common stock of S company for

image text in transcribed

Example 6: Consolidated financial statements-2 years-Cost Method On January 1, 2007, P Company purchased 90% of the outstanding common stock of S company for JD 135000. below are the trial balances of P&S as on Dec 31, 2007: P S cash 91000 35000 Accounts receivables 31500 28000 inventory 30000 16000 equipments 105000 82000 land 29000 34000 investment 135000 dividends declared 20000 25000 130000 40000 Cost of goods sold operating expenses total debits accounts payable other liabilities capital-C.S 20000 15000 591500 275000 19000 10000 10000 20000 180000 120000 other contributed capital retained earnings 1/1/2007 sales dividends income total credits 60000 15000 40000 20000 260000 90000 22500 591500 275000 A-Prepare the consolidated financial statements at the end of year 2007 assuming any difference between the implied value and the book value is attributable to S company's land... b- Prepare the consolidated financial statements on Dec 31, 2008, assuming that the trial balances on that date were as follow: S Cash 91000 31000 Accounts receivables 56000 32000 Inventory 38000 48500 Equipments 124000 80000 Land 29000 34000 Investment 135000 dividends declared 20000 20000 Cost of goods sold 155000 52000 operating expenses 30000 18000 total debits 678000 315500 accounts payable 12500 16000 other liabilities 15000 14500 capital-C.S. 180000 120000 other contributed capital 60000 15000 Aretained earnings 1/1/2008 152500 30000 Sales 240000 120000 dividends income 18000 total credits 678000 315500

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Tools for Business Decision Making

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

8th edition

978-1118953815, 978-1118953907

More Books

Students also viewed these Accounting questions

Question

1. Avoid listening to tattle tale stories about students.

Answered: 1 week ago

Question

What are bounds and what do companies do with them?

Answered: 1 week ago