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Homework answers / question archive / On January 1, 2021, ABC Co
On January 1, 2021, ABC Co. acquired 75% interest in XYZ Co. for P180,000. On this date, the carrying amount of XYZ Co. net identifiable assets was P160,000 equal to fair value. Non-controlling interest was measured using the proportionate share method.
The financial statements of the entities on December 31, 2021 show the following information:
| ASSETS | ABC Co. | XYZ Co. | |
|---|---|---|---|
| Investment in subsidiary (at cost) | 180,000 | - | |
| Equipment - net | 400,000 | 190,000 | |
| Other assets | 200,000 | 45,000 | |
| TOTAL ASSETS | 780,000 | 235,000 | |
| LIABILITIES AND EQUITY | |||
| Liabilities | 70,000 | 25,000 | |
| Share Capital | 600,000 | 100,000 | |
| Retained Earnings | 110,000 | 110,000 | |
| Total Equity | 710,000 | 210,000 | |
| TOTAL LIABILITIES AND EQUITY | 780,000 | 235,000 |
| ABC Co. | XYZ Co. | ||
|---|---|---|---|
| Revenues | 300,000 | 80,000 | |
| Depreciation Expenses | (40,000) | (12,000) | |
| Other Expenses | (32,000) | (18,000) | |
| Gain on sale of Equipment | 12,000 | 0 | |
| Profit for the year | 240,000 | 50,000 |
Additional information:
Required:
Prepare a consolidated statement of financial position and consolidated statement of profit or loss.
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