Plastic Corporation acquired EIGHTY (80%) PERCENT of Synthetic Corporation's ordinary share on January 1,2012 for

 

Plastic Corporation acquired EIGHTY (80%) PERCENT of Synthetic Corporation's ordinary share on January 1,2012 for
P 210,000 Cash. The Shareholder's equity of Synthetic at this time consisted of P 150,000 ordinary shares and P 50,000
Retained earnings
The difference between the price paid and the underlying rquity acuired was due to a P 12,500 undervaluation of
Synthetic's inventory, a P 25,00 undervaluatio of Synthetic's equipment, and goodwill
The undervalued inventories were sold by Synthetic during the year, and the undervalued equipment had a remaining
life of FIVE years.
Synthetic owed Plastic 4,000 on Accounts Payable at December 31,2012. The separate financial statements of Plastic and
Synthetic Corporations at end of year are as follows:
BALANCE SHEET										PLASTIC				SYNTHETIC
	Cash									29,500				30,000
	Trade receivables-net									28,000				40,000
	Dividends receivable									8,000
	Inventories									40,000				30,000
	Land									15,000				30,000
	Buildings-net									65,000				70,000
	Equipment-net									200,000				100,000
	Investment in Synthetic									210,000
		Total assets								595,500				300,000
	Accounts payable									40,000				50,000
	Dividends payable									100,000				10,000
	Other liabilities									50,000				20,000
	Ordinary share P 10 par									300,000				150,000
	Retained earnings									105,500				70,000
		Total liabilities & equity								595,500				300,000
INCOME STATEMENT
	Sales									200,000				110,000
	Cost of sales									(80,000)				(40,000)
	Gross income									120,000				70,000
	Dividend income									16,000				-
	Total income									136,000				70,000
	Depreciation expense									(40,000)				(20,000)
	Other expenses									(25,500)				(10,000)
	NET INCOME									70,500				40,000
RETAINED EARNINGS STATEMENT
	Retained earnings, Jan 1, 2012									75,000				50,000
	Add:		Net income							70,500				40,000
	Less		Dividends							(40,000)				(20,000)
	Retained earnings, Dec 31, 2012									105,500				70,000
REQUIRED:			Prepare a CONSOLIDATED BALANCE SHEET for PARLOR and its subsidiary at DEC. 31, 2012