Question
On January 1, 2030, ABC Corp acquired 60% interest in XYZ Corp by issuing 5,000 shares with fair value of P60 per share and par
On January 1, 2030, ABC Corp acquired 60% interest in XYZ Corp by issuing 5,000 shares with fair value of P60 per share and par value of P40 per share. The financial statements of ABC Corp and XYZ Corp on the acquisition are shown below:
A
X
Book Values
Book Values
Fair Value
Cash
40,000
20,000
20,000
Accounts Receivable
120,000
48,000
48,000
Inventory
160,000
92,000
124,000
Equipment
800,000
200,000
240,000
Accumulated Depreciation
(80,000)
(40,000)
(48,000)
Total Assets
1,040,000
320,000
384,000
Accounts Payable
80,000
24,000
24,000
Bonds Payable
120,000
Ordinary share
480,000
200,000
Share premium
160,000
Retained Earnings
200,000
96,000
Total Liabilities and Equity
1,040,000
320,000
The equipment has a remaining useful life of 4 years from January 1, 2030.ABC Corp. elects to measure NCI as its proportionate share in XYZ net identifiable assets.ABC and XYZ did not declare any dividends in 2030. There were also no intercompany transactions. The group determined that there is no goodwill impairment.The separate statement of financial position on December 31, 2030 of ABC and XYZ is presented as follows:
ABC
XYZ
Cash
92,000
228,000
Accounts Receivable
300,000
88,000
Inventory
420,000
60,000
Investment in XYZ
300,000
Equipment
800,000
200,000
Accumulated Depreciation
(240,000)
(80,000)
Total Assets
1,672,000
496,000
Accounts Payable
172,000
120,000
Bonds Payable
120,000
Ordinary share
680,000
200,000
Share premium
260,000
Retained Earnings
440,000
176,000
Total Liabilities and Equity
1,672,000
496,000
The statement of profit or loss of ABC and XYZ Corp for year 2030 is shown below:
A
X
Sales
1,200,000
480,000
COGS
(660,000)
(288,000)
Gross Profit
540,000
192,000
Depreciation expense
(160,000)
(40,000)
Distribution costs
(128,000)
(72,000)
Interest expense
(12,000)
Profit
240,000
80,000
How much is the consolidated net income?
How much is the consolidated total assets?
How much is the consolidated liabilities?
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Statistics Unlocking The Power Of Data
Authors: Robin H. Lock, Patti Frazer Lock, Kari Lock Morgan, Eric F. Lock, Dennis F. Lock
1st Edition
0470601876, 978-0470601877
