ABC Company acquires all of XYZ Company's outstanding shares on January 1, 2021, by paying P340,000...

Transcribed Image Text:

ABC Company acquires all of XYZ Company's outstanding shares on January 1, 2021, by paying P340,000 cash, and immediately prepares a consolidated balance sheet. The separate balance sheets of the two companies immediately prepared before the consolidation with the acquiree's fair value were presented as follows: ABC Co. XYZ Co. Book Value Book Value 50,000 50,000 60,000 40,000 300,000 500,000 ASSETS Cash Accounts Receivable Inventory Land Buuilding & Equipment (net) Total Assets Liabilities & Shareholders' Equity Accounts Payable Bonds Payable Common Stock, P10 par Paid in Capital in Excess of Par Retained Earnings Total Equities 350,000 75,000 100,000 175,000 400,000 1,100,000 100,000 200,000 500,000 50,000 250,000 1,100,000 100,000 100,000 200,000 20,000 80,000 500,000 1 Record the acquisition of XYZ Co. in the books of ABC Co. 2 Prepare a Schedule of determination and Allocation of Excess 3 Prepare the Elimination entry 4 Prepare the consolidated balance sheet XYZ Co. Fair Value 50,000 50,000 75,000 100,000 290,000 565,000 100,000 135,000 ABC Company acquires all of XYZ Company's outstanding shares on January 1, 2021, by paying P340,000 cash, and immediately prepares a consolidated balance sheet. The separate balance sheets of the two companies immediately prepared before the consolidation with the acquiree's fair value were presented as follows: ABC Co. XYZ Co. Book Value Book Value 50,000 50,000 60,000 40,000 300,000 500,000 ASSETS Cash Accounts Receivable Inventory Land Buuilding & Equipment (net) Total Assets Liabilities & Shareholders' Equity Accounts Payable Bonds Payable Common Stock, P10 par Paid in Capital in Excess of Par Retained Earnings Total Equities 350,000 75,000 100,000 175,000 400,000 1,100,000 100,000 200,000 500,000 50,000 250,000 1,100,000 100,000 100,000 200,000 20,000 80,000 500,000 1 Record the acquisition of XYZ Co. in the books of ABC Co. 2 Prepare a Schedule of determination and Allocation of Excess 3 Prepare the Elimination entry 4 Prepare the consolidated balance sheet XYZ Co. Fair Value 50,000 50,000 75,000 100,000 290,000 565,000 100,000 135,000