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Quiz 02 Subsequent To Acquisition Date

On January 1, 20x1, ABC Co. acquired 80% interest in XYZ, Inc. resulting in goodwill of ₱3,000. XYZ's net assets were adjusted to fair value, increasing inventory by ₱8,000 and equipment by ₱10,000. The consolidated financial statements of ABC Co. and XYZ, Inc. as of December 31, 20x1 are provided, including balance sheets, income statements, and requirements to calculate consolidated amounts and eliminating entries.

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940 views1 page

Quiz 02 Subsequent To Acquisition Date

On January 1, 20x1, ABC Co. acquired 80% interest in XYZ, Inc. resulting in goodwill of ₱3,000. XYZ's net assets were adjusted to fair value, increasing inventory by ₱8,000 and equipment by ₱10,000. The consolidated financial statements of ABC Co. and XYZ, Inc. as of December 31, 20x1 are provided, including balance sheets, income statements, and requirements to calculate consolidated amounts and eliminating entries.

Uploaded by

Erjohn Papa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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On January 1, 20x1, ABC Co. acquired 80% interest in XYZ, Inc. The business combination resulted to goodwill of ₱3,000.

On this date,
XYZ’s equity comprised of ₱50,000 share capital and ₱24,000 retained earnings. NCI was measured at its proportionate share in XYZ’s net
identifiable assets.
XYZ’s assets and liabilities on January 1, 20x1 approximate their fair values except for the following:
Carrying Fair Fair value
XYZ, Inc.
amounts values adjustments (FVA)
Inventory 23,000 31,000 8,000
Equipment (4 yrs. remaining life) 50,000 60,000 10,000
Accumulated depreciation (10,000) (12,000) (2,000)
Totals 63,000 79,000 16,000
The year-end individual financial statements are shown below:
Statements of financial position
As at December 31, 20x1
ABC Co. XYZ, Inc.
ASSETS
Cash 41,000 67,750
Accounts receivable 75,000 22,000
Inventory 97,000 10,400
Investment in subsidiary (at cost) 75,000
Equipment 200,000 50,000
Accumulated depreciation (60,000) (20,000)
TOTAL ASSETS 428,000 130,150
LIABILITIES AND EQUITY
Accounts payable 43,000 30,000
Bonds payable 30,000 -
Total liabilities 73,000 30,000
Share capital 170,000 50,000
Share premium 65,000 -
Retained earnings 120,000 50,150
Total equity 355,000 100,150
TOTAL LIABILITIES AND EQUITY 428,000 130,150

Statements of profit or loss


For the year ended December 31, 20x1
ABC Co. XYZ, Inc.
Sales 330,000 150,750
Cost of goods sold (185,000) (96,600)
Gross profit 145,000 54,150
Depreciation expense (40,000) (10,000)
Distribution costs (32,000) (18,000)
Interest expense (3,000) -
Profit for the year 70,000 26,150
Requirements:
1. How much is the NCI in net assets as of December 31, 20x1?
2. How much is the consolidated retained earnings?
3. How much is the consolidated profit or loss?
4. How much is the consolidated profit or loss attributable to Owners of parent
5. How much is the consolidated profit or loss attributable to NCI
6. How much is the consolidated ending inventory?
7. How much is the consolidated sales?
8. How much is the consolidated cost of sales?
9. How much is the consolidated total assets?
10. How much is the consolidated total liabilities?
11. How much is the consolidated total equity?
12. Prepare all eliminating entries.

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