P Co acquired 75% of the shares in S Co on 1 January 20X2 when the retained earnings of S Co stood at $10,000. The fair value of the NCI at the date of acquisition was $15,000. During the year to 31 December 20X2, S Co sold goods to P Co for $20,000 at a mark-up of 25%. 50% of these goods were still unsold by P Co at the end of the year. At the same date, P Co owed S Co $12,000 for goods bought and this debt is included in the trade payables of P Co and the trade receivables of S Co. Draft statements of financial position of each company at 31 December 20X2 were as follows. P Co %24 S Co 2. %24 Assets Non-current assets Tangible assets Investment in S Co at cost 40,000 80,000 46,000 126,000 Current assets Trade receivables 30,000 10,000 25,000 5,000 Inventories 40,000 166,000 30,000 70,000 Total assets Equity and liabilities Equity Ordinary shares of $1 each Retained earnings 100,000 45,000 30,000 22,000 145,000 52,000 Current liabilities Trade payables Total equity and liabilities 21,000 166,000 18,000 70,000 Required Prepare a draft consolidated statement of financial position for P Co.
P Co acquired 75% of the shares in S Co on 1 January 20X2 when the retained earnings of S Co stood at $10,000. The fair value of the NCI at the date of acquisition was $15,000. During the year to 31 December 20X2, S Co sold goods to P Co for $20,000 at a mark-up of 25%. 50% of these goods were still unsold by P Co at the end of the year. At the same date, P Co owed S Co $12,000 for goods bought and this debt is included in the trade payables of P Co and the trade receivables of S Co. Draft statements of financial position of each company at 31 December 20X2 were as follows. P Co %24 S Co 2. %24 Assets Non-current assets Tangible assets Investment in S Co at cost 40,000 80,000 46,000 126,000 Current assets Trade receivables 30,000 10,000 25,000 5,000 Inventories 40,000 166,000 30,000 70,000 Total assets Equity and liabilities Equity Ordinary shares of $1 each Retained earnings 100,000 45,000 30,000 22,000 145,000 52,000 Current liabilities Trade payables Total equity and liabilities 21,000 166,000 18,000 70,000 Required Prepare a draft consolidated statement of financial position for P Co.
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 1BCRQ
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you