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Parco Corporation

Parco Corporation purchased 80% of Stop Company for P395,000 cash. Stop Company had assets of P850,000 and liabilities of P400,000. The fair values of Stop's inventories and property & equipment were P275,000 and P500,000 respectively. Goodwill must be shown as P25,000 in the consolidated statement of financial position.

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340 views2 pages

Parco Corporation

Parco Corporation purchased 80% of Stop Company for P395,000 cash. Stop Company had assets of P850,000 and liabilities of P400,000. The fair values of Stop's inventories and property & equipment were P275,000 and P500,000 respectively. Goodwill must be shown as P25,000 in the consolidated statement of financial position.

Uploaded by

Wawex Davis
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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6.

On December 31,2013, Parco Corporation purchased 80% of the outstanding common stock

of Stop Company for P395,000 cash. The condensed statement of financial position of Stop

Company as of the date of the purchase is shown below (in thousands):

Assets Liabilities and stockholders’ equity

Cash P150 Liabilities P400


Inventories 250 Common stock, P1 par value 50
Property & equipment (net) 450 Additional paid in capital 100
____ Retained earnings

Total P850 Total


On December 31,2013, the inventories and property and equipment of Stop had a fair values of

P275,000 and P500,000 respectively. The fair value of NCI on December 31,2013 is P100,000.

How much goodwill (gain on acquisition) must be shown in the consolidated statement of

financial position of Parco Corporation and its subsidiary Stop Company on December 31,2013?

a. P(30,000)

b. P30,000

c. P(25,000)

d. P25,000

7. On January 2,2013, Papa, Inc. acquired 80% of the outstanding shares of Son Company for

P1,952,000 cash. At the time of the acquisition, the stockholders’ equity section of the two

companies is shown below:

(in thousands)
Son Company
P1,600
Papa Inc.

Common stock P4,000

Additional paid in capital 3,000 480

Retained earnings 6,840 420 total P13,840 P2,500

Assuming NCI is measured at its implied fair value. What is the stockholders’ equity on the

consolidated of financial position on January 2,2013? a. P13,840,000

b. P14,328,000

c. P17,260,000

d. P15,440,000

8. The condensed statement of financial position of Pop Corporation and Sun Company as

of October 31,2013 are presented below:

Pop Corp. Sun Co.

Assets P3,800,000 P850,000

liabilities 1,350,000 250,000

Common stock, P100 par 1,500,000 500,000 Retained earnings 950,000 100,000 total

P3,800,000 P3,800,000

On October 31,2013, Pop Corporation acquired 4,000 shares of Sun Company at P520,000. The

market price of the 1,000 shares of Sun on October 31,2013 is P140 per share.

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