Determine the Consolidated Retained Earnings

Reference no: EM132774023

Question - On January 1, 2018, P Company acquired 90% of the outstanding shares of S Company by issuing 100,000 shares of its P10 par ordinary shares with a market price of P1,020,000 and cash of P1,100,000. The stockholders' equity of both companies are as follows:

Share Capital P - 2,500,000 S - 1,500,000

Share Premium P - 800,000 S - 150,000

Retained Earnings P - 1,500,000 S - 850,000

P Company also paid the following acquisition costs: Direct Costs of P20,000 and issuance and registration costs of shares of P30,000. The fair value of the P Company's net assets was approximated at P4,600,000 while the book value of S Company's net assets was the same with their fair values except for a liability item which was understated by P3,000. The acquirer opted to measure NCI at their proportionate share of the identifiable net assets.

Required -

a. Determine the Consolidated Retained Earnings?

b. Determine the Consolidated Shareholders' Equity?

Reference no: EM132774023

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