Reference no: EM132785779
Problem - 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:
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P Company
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S Company
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Share Capital
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2,500,000
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1,500,000
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Share Premium
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800,000
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150,000
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Retained Earnings
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1,500,000
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850,000
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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 - Determine the following:
a. Consolidated Retained Earnings
b. Consolidated Shareholders' Equity
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