On January 1, 2021, ABC Co. acquired 70% interest in XYZ Co. The financial statements...
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Accounting
On January 1, 2021, ABC Co. acquired 70% interest in XYZ Co. The financial statements of the combining entities right after the business combinations are as follows:
ABC Co.
XYZ Co.
Cash
100,000
20,000
Account Receivable
120,000
40,000
Inventory
400,000
100,000
Investment in Subsidiary
560,000
Prepaid Assets
30,000
10,000
Building, Net
1,200,000
400,000
Total Assets
2, 410,000
570,000
Accounts Payable
70,000
90,000
Share Capital
1,000,000
200,000
Share Premium
350,000
50,000
Retained Earnings
990,000
230,000
Total Liabilities and Equity
2,410,000
570,000
The carrying amounts of XYZ's Assets and Liabilities approximate the acquisition date fair values , except as follows:
Carrying Amount
Fair value
Accounts Receivable
40,000
20,000
Building, net
400,000
540,000
ABC measured the NCI at proportionate share Requirement: Prepare the consolidated statement of financial position.
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