Prepare a journal entry on Polypeptide books

Reference no: EM132648987

Question - The January 1, 2011 statement of financial position of Skittle Company at book and market values is as follows:

Book Value Fair Value

Current Assets P800,000 P750,000

Property and Equipment (net) 900,000 1,000,000

Total Assets P1,700,000 P1,750,000

Current Liabilities P300,000 P300,000

Long-term Liabilities 500,000 460,000

Ordinary Share Capital, P1 par 100,000

Share Premium 200,000

Accumulated Profits 600,000

Total Liabilities and Shareholders' equity P1,700,000

Polypeptide Company paid P950,000 in cash for 90% of Skittle Company's ordinary share capital.

Required -

1. Prepare a journal entry on Polypeptide's books to record the acquisition of the Skittles share.

2. Prepare a schedule of the allocation of the difference between the consideration given and the book value of interest acquired from Skittle Company.

3. Prepare the elimination entries for the consolidated statements worksheet.

Reference no: EM132648987

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