Maurice Tutor

(5)

$15/per page/Negotiable

About Maurice Tutor

Levels Tought:
Elementary,Middle School,High School,College,University,PHD

Expertise:
Algebra,Applied Sciences See all
Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all
Teaching Since: May 2017
Last Sign in: 401 Weeks Ago, 4 Days Ago
Questions Answered: 66690
Tutorials Posted: 66688

Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

Experience

  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 03 Aug 2017 My Price 11.00

P Company

On December 31, Year 1, P Company purchased 80% of the outstanding shares of S Company for $6,960 cash.

The statements of financial position of the two companies immediately after the acquisition transaction appear below.

 

P Company

S Company
 

Book value

Book value

Fair value

Plant and equipment (net)

$ 8,100

$ 6,900

$6,000

Investment in S Company

6,960

—

  

Inventory

5,160

3,750

3,900

Accounts receivable

3,150

1,800

1,800

Cash

1,500

1,050

1,050
 

$24,870

$13,500

  

Ordinary shares

$10,500

$ 3,000

  

Retained earnings

8,370

6,000

  

Long-term liabilities

4,200

2,000

2,000

Other current liabilities

1,200

1,800

1,800

Accounts payable

600

700

700
 

$24,870

$13,500

  

Required:

(a) Prepare a consolidated statement of financial position at the date of acquisition under each of the following:

(i) Proprietary theory

(ii) Parent company theory

(iii) Parent company extension theory

(iv) Entity theory

(b) Calculate the current ratio and debt-to-equity ratio for P Company under the four different theories. Explain which theory shows the strongest liquidity and solvency position and which method best reflects the true financial condition of the company.

Answers

Maurice Tutor
(5)
Status NEW Posted 03 Aug 2017 09:08 PM My Price 11.00

Hel-----------lo -----------Sir-----------/Ma-----------dam-----------Tha-----------nk -----------You----------- fo-----------r u-----------sin-----------g o-----------ur -----------web-----------sit-----------e a-----------nd -----------and----------- ac-----------qui-----------sit-----------ion----------- of----------- my----------- po-----------ste-----------d s-----------olu-----------tio-----------n.P-----------lea-----------se -----------pin-----------g m-----------e o-----------n c-----------xha-----------t I----------- am----------- on-----------lin-----------e o-----------r i-----------nbo-----------x m-----------e a----------- me-----------ssa-----------ge -----------I w-----------ill-----------

Not Rated(0)