ACCOUNTING FOR BUSINESS COMBINATIONS PRE7 – MIDTERM

MIDTERM QUIZZES #7:

ELIMINATION
Accounts Jook Company Jin Company Consolidation
Debit Credit
Cash & cash equivalents P70,000 P90,000 P160,000
Inventory 100,000 60,000 160,000
Property and equipment 500,000 250,000 50,000 800,000
Investment in Jin
260,000 260,000
Company
Goodwill 85,000 85,000
Total P930,000 P400,000 P1,205,000

Current liabilities P180,000 P60,000 P240,000

Long-term liabilities 200,000 90,000 60,000 350,000
Common stock 300,000 100,000 100,000 300,000
Retained Earnings 250,000 150,000 150,000 250,000
48,000
Non-controlling interest 65,000
17,000
Total P930,000 P400,000 P385,000 P385,000 P1,205,000

TOTAL FV P (80%) NCI (20%)

Company fair value 325,000 260,000 65,000
FV of net assets 240,000 192,000 48,000
Goodwill P85,000 P68,000 P17,000