Last Name CARIQUITAN

First Name JUSTINE

What you will do:

A You can only edit in all yellow cells in this file.

B Complete what is needed per tab:

Tab Description
2 The data is given in this sheet
3 Make a calculation whether the acquisition results in goodwill, bargain or none.
4 Make the entry in parent's books to record the investment.
5 Make the working paper elimination entry to facilitate the consolidation.
6 Complete the working paper and show the consolidated figures in the last columns.

C. Rename this file as: ACCTG315_Async Act 3_LAST NAME, First Name
Make sure you rename your file otherwise it wont be graded.

D Deadline: May 14, 2022 (2400H)

odwill, bargain or none.

e consolidation.
figures in the last columns.
PROBLEM 1

Assume that AAA Co. plans to acquire XYZ Co. As its subsidiary on April 30, 2022.
Below are the statements of financial position of the two companies before the acquisition is made:

AAA Co. and XYZ Co.

Statement of financial position
April 30, 2022.

AAA Co. XYZ Co.

Assets
Current Assets
Cash 1,675,300 250,125
Trade Receivables 900,250 180,375
Inventory 715,350 81,000
Prepayments 120,000 15,000
Total Current Assets 3,410,900 526,500
Non-current Assets
Equipment (net) 1,635,000 639,250
Other Assets 110,000 120,000
Total Non-current Assets 1,745,000 759,250
Total Assets 5,155,900 1,285,750

Liabilities and Equity

Liabilities
Current Liabilities
Trade Payables 911,000 305,620
Loan Payable -current portion 275,000 -
Total Current Liabilities 1,186,000 305,620
Non-Current Liability
Loan Payable -non-current portion 825,000 -
Total Non-current Liabilities 825,000 -
Total Liabilities 2,011,000 305,620

Equity
Common Stock 2,000,000 500,000
Additional Paid-in Capital 800,000 350,000
Retained Earnings 344,900 130,130
Total Equity 3,144,900 980,130
Total Liabilities and Equity 5,155,900 1,285,750
Make a calculation comparing the consideration given against the book value of the consideration acquired.
Assume that 100% stake in the XYZ co.s equity is to be paid in cash.

Question: How much is the amount of cash to be paid by AAA Co. To Xyz Co.? P980,130.00

Solution:

Consideration given: 980,130.00

Less: Book value of interest acquired (100%)
Common stock, XYZ CO. P500,000.00
APIC-XYZ CO. 350,000.00
Retained earnings 130,130.00 980,130.00
Excess 0.00
tion acquired.

P980,130.00
General Journal

DATE ACCOUNT DEBIT

These green cells is a sample journal entry format which you will follow. You can only edit within the white cells in the jour
10 May, 2022 Account to be Debited 100,000.00
Account to be Credited
# To record investment by the owner (sample description)
30, April 2022 Investment in XYZ Company 980,130.00
Cash
# To record invsetment of AAA CO. TO XYZ CO.
**** **** ****
 CREDIT
he white cells in the journal

100,000.00
980,130.00
****
General Journal

DATE ACCOUNT DEBIT

These green cells is a sample journal entry format which you will follow. You can only edit within the white cells in the jour
10 May, 2022 Account to be Debited 100,000.00
Account to be Credited
# To record investment by the owner (sample description)

30, April, 2022 Common Stock 500,000.00

Additional Paid-in Capital 350,000.00
Retained earnings 130,130.00
Investment in XYZ Co.
# To record investment of AAA Co. to XYZ Co.
**** **** ****
 CREDIT
he white cells in the journal

100,000.00

980,130.00
****
AAA Company and Subsidiary
Consolidat
30, April, 2022

AAA Co. XYZ Co.

Assets
Cash 695,170.00 250,125.00
Trade receivables 900,250.00 180,375.00
Inventory 715,350.00 81,000.00
Prepayments 120,000.00 15,000.00
Equipment 1,635,000.00 639,250.00
Other Assets 110,000.00 120,000.00
Investment in XYZ Company 980,130.00

Total Assets 5,155,900.00 1,285,750.00

Liabilities and Equity

Trade Payables 911,000.00 306,620.00
Loan Payable - current portion 275,000.00 -
Loan Payable - non-current portion 825,000.00 -
Common Stock:
AAA Company 2,000,000.00
XYZ Company 500,000.00
Additional Paid-in Capital
AAA Company 800,000.00
XYZ Company 350,000.00
Retained earnings
AAA Company 344,900.00
XYZ Company 130,130.00

Total Liablities and Equity 5,155,900.00 1,285,750.00

* * * *
 Eliminations
Debit Credit Consolidated

945,295.00
1,080,625.00
796,350.00
135,000.00
2,274,250.00
230,000.00
980,130.00

5,416,520.00

1,216,620.00
275,000.00
825,000.00

2,000,000.00
500,000.00

800,000.00
350,000.00

344,900.00
130,130.00

5,416,520.00
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