A. Investment in Subsidiary - Solo Co.

250,000 Polo
Common Stock 100,000 Consolidate
Additional Paid-in Capital 150,000 As
To record the acquisition of the Solo Co.'s stocks by issuing
own shares and acquisition-related costs
Cash
Receivables
B. Professional fees expense 10,000 Inventory
Additional Paid-in Capital 20,000 Property, plant and equ
Cash 30,000 Goodwill
To record the professional fees and stock issuance costs paid Total Assets
LIABILITIE
Current Liabilities
E (1) PPE (more than its book value) 40,000 Long-term Liabilities
Common Stock - Solo Co. 90,000 Common Stock
Retained Earnings - Solo Co. 100,000 Additional Paid-in Capit
Goodwill 20,000 Retained Earnings
Investment in Subsidiary - Solo CO. 250,000 Total Liabilities and Sh
To eliminate the subsidiary account against the equity
accounts from Solo Co.

Shares Consideration 250,000

Less: Book value of Interest Acquired
Common Stock 90,000
Retained Earnings 100,000 190,000
Balance 60,000
Less: Equipment (more than book value) 40,000
Goodwill 20,000

A. Investment in Sotto Company 950,000

Cash 950,000
To record the acquisition of the Sotto Company's stocks

B. Fair Value Pedro (80%) Sotto (20%)

Fair Value of subsidiary 1,180,000 950,000 230,000
Less: Book value of interest acquired
Common stock 100,000
APIC 200,000
Retained earnings 600,000
Total equity 900,000 900,000 900,000
Interest acquired 0.80 0.20
Book value 720,000 180,000
 Excess 280,000 230,000 50,000
Adjustment of Identifiable Net Assets:
Currents assets 50,000
PPE (Net) - 100,000
Current liabilities 0
Long-term liabilities - 40,000
Goodwill 190,000

E (1) Common stock - Sotto Co. 100,000

APIC - Sotto Co. 200,000
Retained Earnings - Sotto Co. 600,000
Investment in Sotto Company 720,000
Non-controlling interest 180,000
To eliminate the subsidiary accounts against equity accounts
from Sotto Co.

E (2) Property and equipment (Net) 100,000

Long-term liabilities 40,000
Goodwill 190,000
Current assets 50,000
Investment in Sotto Company 230,000
Non-controlling interest 50,000
To eliminate the subsidiary accounts against the adjustments
of the net assets at their fair values
 Polo Company and Subsidiary
Consolidated Statement of Financial Position
As of December 31, 2020

ASSETS
70,000
Receivables 120,000
170,000
Property, plant and equipment (net) 340,000
20,000
Total Assets 720,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities 30,000
Long-term Liabilities 120,000
Common Stock 210,000
Additional Paid-in Capital 150,000
Retained Earnings 210,000
Total Liabilities and Shareholders' Equity 720,000