CMU

Enrichment Learning Activity

Name: Date:
Year and Section: Instructor
:
Module #: Topic:

Directions:

On January 1, 20x1, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P30 per share and
par value of P20 per share. The financial statements of ABC Co. and XYZ, Inc. immediately after the acquisition are shown
below:

  Jan. 1, 20x1

  ABC Co. XYZ, Inc.

Cash 20,000 10,000

Accounts receivable 60,000 24,000

Inventory 80,000 46,000

Investment in subsidiary 150,000

Equipment 400,000 100,000

Accumulated depreciation (40,000) (20,000)

Total assets 670,000 160,000

Accounts payable 40,000 12,000

Bonds payable 60,000 -

Share capital 340,000 100,000

Share premium 130,000 -

Retained earnings 100,000 48,000

Total liabilities and equity 670,000 160,000

On January 1, 20x1, the fair value of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows:

Carrying Fair Fair value

XYZ, Inc.
amounts values increment

SY2021-2022 1st Term Homework

 CMU
Enrichment Learning Activity

Cash 10,000 10,000 -

Accounts receivable 24,000 24,000 -

Inventory 46,000 62,000 16,000

Equipment 100,000 120,000 20,000

Accumulated depreciation (20,000) (24,000) (4,000)

Accounts payable (12,000) (12,000) -

Net assets 148,000 180,000 32,000

The equipment has a remaining useful life as of 4 years from January 1, 20x1.

Requirement: Prepare the consolidated statement of financial position as at January 1, 20x1. ABC Co. elects to measure
non-controlling interest as its proportionate share in XYZ’s net identifiable assets.

SY2021-2022 1st Term Homework