CONSOLIDATED STATEMENTS ON DATE OF ACQUISITION
Case 1: Acquisition equal to book value
The statements of financial position of P Company and S Company after the investment of
P100,000 made by P Company to S Company are shown below:
P Company and S Company
Statement of Financial Position
December 31, 2019
P Company S Company
Cash 130,000 118,000 248,000
Accounts Receivable 40,000 32,000 72,000
Inventory 50,000 20,000 70,000
Equipment-net 180,000 140,000 320,000
Investment in S Co. Stock 100,000 100,000
500,000 310,000 810,000
Accounts Payable 280,000 210,000 goodwill 10,000
Common Stock 100,000 50,000
Additional paid In capital 80,000 30,000 80,000
Retained Earnings 40,000 20,000 40,000
500,000 310,000 710,000
Case 2: Acquisition at more than book value
Assume instead that P Company acquires 100% of S Company's outstanding stock for P110,000 cash
on December 31, 2019.
On the date of acquisition, P Company records the acquisition of stock in its books with the ffg. Entty:
Invesment in S Company Stock 110,000
Cash 110,000
The affected accounts are as follows:
Cash 120,000
Investment in S Company Stock 110,000
Case 3: Acquisition at Less thatn book value (bargain purchase)
Assume that P Company paid only P80,000 for the 100% interest In the stockholdes' equity of S Company.
P Company makes the following entry to record the acquisition.
Investment in S Company 80,000
Cash 80,000
After posting the above entry, P Company's SFP will show the following balances for the affected accounts.
Cash P150,000
Investment in S Co. Stock P80,000
Case 4: Acquisition of a partially owned subsidiary at more than fair value
Prresented below are the SFP of P Company and S Company before the acquisition.
P Company
Statement of Financial Position
December 31, 2019
Assets Liabiities and Equity
Cash 218,000 Accounts Payable 160,000
Accounts Receivable 144,000 Bonds Payable 400,000
Inventory 160,000 Common Stock, P10 par 400,000
Land 200,000 APIC 500,000
Buildings (net) 840,000 Retained Earnings 502,000
Equipment (net) 400,000
1,962,000 1,962,000
S Company
Statement of Financial Position
December 31,2019
Book value Fair Value ifference
Assets
Accounts Receivable 40,000 40,000
Inventory 100,000 110,000 10,000
Land 80,000 130,000 50,000
Buildings, net 300,000 500,000 200,000
Equipment, net 80,000 120,000 40,000
Total Assets 600,000 900,000 300,000
Liabilities and Equity
Accounts Payable 80,000 80,000
Bonds Payable 200,000 200,000
Common Stock, P1 par 20,000
Additional Paid in Capital 180,000
Retained earnings 120,000
Total Liabilities and Equity 600,000
238
oodwill 10,000
e ffg. Entty:
110,000 cash 120,000 common stoch 50
100,000 investment 110,000 apic 30,000
10,000 goodwill re
goowill 10,000
investment in s company 110,000
y of S Company. cash 268,000ar 72
ampunt paid 80,000 inve 70
bv 100,000 equipp 320
gain on bargain 20,000 asset 730k
p company ap490
common stovk 50 cs 100
ffected accounts. apic 30 apic80
re 20 re 60
investment in s 80
re 20
iaaues 16k share of its 10p par common stock for 80% of os of its company the
p company pays 50k onits company acquisistion
378,000
544,000
560,000
700,000
1342000.00
400,000
3,924,000
p company
asset 2,712,000
liab 2,712,000
consi paid 800,000
fv of nci 1,700,000
620,000
gain on bargain purcahse
goodwil 350,000
common stock 20
apic 180
re 120
investment in s 320
ar 10,000
inv 50,000
buildings 200,000
equip 40,000
goodwill 350,000
investment in s company 480,000
nci 170,000
aeets ap
cash 168,000
ar 184,000 bp 600
inv 270, cs 560
land 330,000 apiic1,
building 1340 nci 170
equipment
total 3,162,000
nt in s company 110,000
