Make a journal entry recorded by PT Persada

Assignment Help Accounting Basics

Reference no: EM132717221

Question - Advanced Accounting - PT Persada acquired 80% of PT Semesta's shares on January 1, 2019 by issuing $20,000 shares of common stock with a nominal nominal value of $10,000 per share. PT Semesta's balance sheet just prior to the acquisition is as follows (in thousands)

	(Book Value)	(Fair Value)
Cash & Account Receivable	40,000	40,000
Inventories (FIFO)	80,000	70,000
Land	50,000	60,000
Building & Equipment (Net)	240,000	320,000
Total assets	410,000
Account Payable	70,000	70,000
Common Share Capital	130,000
Retained Earnings	210,000
Total Liabilities & Equities	410,000

The two companies agreed on the fair value of the net assets acquired. At the acquisition date, the remaining economic life of the Building and Equipment is 20 years. For 2019, PT Semesta reported a net profit of $60,000,000 and pay dividends of $20 million.

Required -

a. Calculate the market price of PT Persada's shares on the acquisition date!

b. Make a journal entry recorded by PT Persada during 2019 in relation to its investment in PT Semesta (ekurtas method)!

c. Calculate the investment balance in PT Semesta as of December 31, 2019!

d. Make a journal to make a consolidated balance sheet report for PT Persada and its subsidiaries at the end of 2019!

Reference no: EM132717221

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