Compute the consolidated assets in 2023 Finale Corporation acquired 80% of the outstanding shares of Closing Company
Fantastic news! We've Found the answer you've been seeking!
Question:
Compute the consolidated assets in 2023
Transcribed Image Text:
Finale Corporation acquired 80% of the outstanding shares of Closing Company on January 2, 2022 for P3,250,000, excluding control premium of P125,000. On this date, the balances of Closing Company's stockholders' equity accounts were: Ordinary Shares -P2,475,000 and Retained Earnings- P495,000. An examination of Closing Company's assets and liabilities on the date of acquisition, revealed that book values were equal to their fair values for all items except merchandise, which was undervalued by P260,000; land, which was undervalued by P410,000; equipment, which was overvalued by P290,000 and copyright was undervalued by P380,000 and any remaining excess was attributable to goodwill. 3/4 of the inventories were sold in 2022 and 1/4 of the remaining amount from previous year in 2023. The equipment had a remaining life of 5 years while copyright had a remaining life of 8 years. Goodwill arising from acquisition was impaired in the amount of P30,000 in 2022 and P50,000 in 2023. Noncontrolling interest is measured at fair value in the amount of P850,000. During 2022, intercompany sales of merchandise amount to P1,450,000, of which P125,000 remains in the ending inventory of Closing Co. Likewise, Finale Corp.'s December 31, 2022 inventory includes P148,000 from intercompany cash sales. Finale Corporation's mark-up was 30% of sales while Closing Company's selling price is at 125% of cost. On April 1, 2023, There was a downstream sale of land for P2,400,000. On this date the land was carried on Finale Co.'s books at P1,600,000. On July 1, 2023, Closing Company sold a furniture to Finale Corporation for P400,000. On this date the furniture was carried on Closing Co.'s books, net of accumulated depreciation at P540,000. The furniture was estimated to have a remaining life of 4 years on the date of sale. On October 1, 2023, there was an upstream sale of building for P4,950,000. On this date the building was carried on Closing Co.'s books, net of accumulated depreciation at P4,125,000. The building was estimated to have a remaining life of 6 years on the date of sale. Also, there were inter-company cash sales of merchandise. During 2023, intercompany sales amount to P2,970,000, of which P198,000 remains in the ending inventory of Closing Co. Likewise, Finale Corp.'s December 31, 2023 inventory includes, P231,000 from intercompany sales. Finale Corporation accounts for its Investment in Closing Company using the cost method. Unconsolidated Statement of Financial Position as of December 31, 2023 show: Cash Trade Receivables FINALE CLOSING 1,550,000 985,000 728,000 800,000 Merchandise Inventory 1,980,000 1,260,000 Furniture, net 570,000 370,000 Equipment, net 1,300,000 500,000 Building, net 6,000,000 1,500,000 Land 3,800,000 2,700,000 Copyright, net 370,000 220,000 Goodwill 120,000 Investment in Closing Co. 3,375,000 Cost of goods sold 6,600,000 3,200,000 Loss on sale of furniture 37,000 140,000 Operating expenses 3,465,000 1,290,000 Dividend declared 1,650,000 1,500,000 31.425,000 14,585,000 Liabilities 2,450,000 1,535,000 Ordinary shares 9,250,000 2,475,000 Retained Earning, 1/1.23 3.975,000 1,650,000 Sales 13,250,000 7,600,000 800,000 200,000 Gain on sale of land Gain on sale of building Dividend revenue 400,000 825,000 1,300,000 300,000 31,425,000 14,585,000 Finale Corporation acquired 80% of the outstanding shares of Closing Company on January 2, 2022 for P3,250,000, excluding control premium of P125,000. On this date, the balances of Closing Company's stockholders' equity accounts were: Ordinary Shares -P2,475,000 and Retained Earnings- P495,000. An examination of Closing Company's assets and liabilities on the date of acquisition, revealed that book values were equal to their fair values for all items except merchandise, which was undervalued by P260,000; land, which was undervalued by P410,000; equipment, which was overvalued by P290,000 and copyright was undervalued by P380,000 and any remaining excess was attributable to goodwill. 3/4 of the inventories were sold in 2022 and 1/4 of the remaining amount from previous year in 2023. The equipment had a remaining life of 5 years while copyright had a remaining life of 8 years. Goodwill arising from acquisition was impaired in the amount of P30,000 in 2022 and P50,000 in 2023. Noncontrolling interest is measured at fair value in the amount of P850,000. During 2022, intercompany sales of merchandise amount to P1,450,000, of which P125,000 remains in the ending inventory of Closing Co. Likewise, Finale Corp.'s December 31, 2022 inventory includes P148,000 from intercompany cash sales. Finale Corporation's mark-up was 30% of sales while Closing Company's selling price is at 125% of cost. On April 1, 2023, There was a downstream sale of land for P2,400,000. On this date the land was carried on Finale Co.'s books at P1,600,000. On July 1, 2023, Closing Company sold a furniture to Finale Corporation for P400,000. On this date the furniture was carried on Closing Co.'s books, net of accumulated depreciation at P540,000. The furniture was estimated to have a remaining life of 4 years on the date of sale. On October 1, 2023, there was an upstream sale of building for P4,950,000. On this date the building was carried on Closing Co.'s books, net of accumulated depreciation at P4,125,000. The building was estimated to have a remaining life of 6 years on the date of sale. Also, there were inter-company cash sales of merchandise. During 2023, intercompany sales amount to P2,970,000, of which P198,000 remains in the ending inventory of Closing Co. Likewise, Finale Corp.'s December 31, 2023 inventory includes, P231,000 from intercompany sales. Finale Corporation accounts for its Investment in Closing Company using the cost method. Unconsolidated Statement of Financial Position as of December 31, 2023 show: Cash Trade Receivables FINALE CLOSING 1,550,000 985,000 728,000 800,000 Merchandise Inventory 1,980,000 1,260,000 Furniture, net 570,000 370,000 Equipment, net 1,300,000 500,000 Building, net 6,000,000 1,500,000 Land 3,800,000 2,700,000 Copyright, net 370,000 220,000 Goodwill 120,000 Investment in Closing Co. 3,375,000 Cost of goods sold 6,600,000 3,200,000 Loss on sale of furniture 37,000 140,000 Operating expenses 3,465,000 1,290,000 Dividend declared 1,650,000 1,500,000 31.425,000 14,585,000 Liabilities 2,450,000 1,535,000 Ordinary shares 9,250,000 2,475,000 Retained Earning, 1/1.23 3.975,000 1,650,000 Sales 13,250,000 7,600,000 800,000 200,000 Gain on sale of land Gain on sale of building Dividend revenue 400,000 825,000 1,300,000 300,000 31,425,000 14,585,000
Expert Answer:
Answer rating: 100% (QA)
Answer To prepare the consolidated financial statements for Finale Corporation and Closing Company as of December 31 2023 we need to eliminate the eff... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
1. HOW MUCH IS THE CONVERSION COST 2. HOW MUCH IS THE RAW MATERIALS END 3. HOW MUCH IS THE PRIME COST 4. HOW MUCH IS THE COST OF GOODS SOLD 5. HOW MUCH IS THE COST OF GOODS...
-
1. (X) Inc. purchased 80% of the outstanding voting shares of (Y) for $360,000 on July 1, 2017. On that date, (Y) had common shares and retained earnings worth $180,000 and $90,000, respectively. The...
-
Forward exchange contract designated as a fair value hedge of a foreign-currency-denominated accounts receivable, weakening $US On October 15, 2018, our company sells to a retailer located in Austria...
-
(27b1/3c3/4 / 8b-2/3c1/2)4/3 Simplify. Assume b and c are positive.
-
A particle that has an 8.2 C charge moves with a velocity of magnitude 5.0 105 m/s along the +x axis. It experiences no magnetic force, although there is a magnetic field present. The maximum...
-
How do you delineate the differences in the System Operations Model (Figure 6.1) from its robust version (Figure 6.2)? System Development Phase Continue (5 Mission Notification Configure System for...
-
At December 31, 2012, Percheron Inc. had a deferred tax asset of $30,000. At December 31, 2013, the deferred tax asset is $59,000. The corporations 2013 current tax expense is $61,000. What amount...
-
Oriole Corporation manufactures safes-large mobile safes, and large walk-in stationary bank safes. As part of its annual budgeting process, Oriole is analyzing the profitability of its two products....
-
Use the following items taken from the financial statements of the Postal Service for the year ending December 31, 2012Accounts payable $ 9,000 Accounts receivable 11,000 Accumulated depreciation -...
-
Discuss how you would evaluate the effectiveness of your approach towards psychology contract breach?
-
You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company s financial...
-
A Federally qualified community health center is implementing an electronical medical record (EMR) costing $35,000 per physician provider. Identify the benefits of the EMR. Identify the ways those...
-
Explain how prepayment risk affects the value of an Interest-only tranche and the Principal-only tranche in a CMO.
-
What is the annual percentage rate of interest on terms: 3/7, net 27? WHAT WOULD BE THE EASIEST WAY TO CALCULATE THIS ON A CALCULATOR? Balance Sheet Assets Cash 2013 Income Statement 2013 Sales $...
-
Evaluate the differences in the degree of security between computer systems of the 1960s and those of today.
-
Refer to the table to answer the following questions. Year Nominal GDP (in billions) Total Federal Spending (in billions) Real GDP (in billions) Real Federal Spending (in billions) 2000 9,817 578...
-
A stock price is governed by \[\frac{\mathrm{d} S}{S}=\mu \mathrm{d} t+\sigma \mathrm{d} z\] where \(z\) is a standardized Wiener process. Interest is constant at rate \(r\). An investor wishes to...
-
At the beginning of April one year, the silver forward prices (in cents per troy ounce) were as follows: The carrying cost of silver is about 20 cents per ounce per year, paid at the beginning of...
-
Suppose that a forward contract on an asset is written at time zero and there are \(M\) periods until delivery. Suppose that the proportional carrying charge in period \(k\) is \(q S(k)\), where...
Study smarter with the SolutionInn App