Liabilities and Equity of ABC Co Discussion 

On January 1, 20×2, ABC Co. sells 60% out of its 80% interest in XYZ, Inc. for ₱100,000. ABC’s remaining 20% interest in XYZ has a fair value of ₱25,000. This gives ABC significant influence over XYZ. The statements of financial position immediately before the sale are shown below:

Statements of financial position As at January 1, 20×2

ABC Co. XYZ, Inc. Consolidated

ASSETS

 Cash 23,000 57,000 80,000

Accounts receivable 75,000 22,000 97,000

Inventory 105,000 15,000 120,000

Investment in subsidiary75,000 – –

Equipment 200,000 50,000 260,000

Accumulated depreciation (60,000) (20,000) (84,000)

Goodwill – – 3,000

TOTAL ASSETS 418,000 124,000 476,000

 LIABILITIES AND EQUITY

Accounts payable 43,000 30,000 73,000

Bonds payable 30,000 – 30,000

Total liabilities 73,000 30,000 103,000

Share capital 170,000 50,000 170,000

Share premium 65,000 – 65,000

Retained earnings 110,000 44,000 118,000

Non-controlling interest – – 20,000

Total equity 345,000 94,000 373,000

TOTAL LIAB. & EQTY. 418,000 124,000 476,000

How much is the gain (loss) on the disposal? ______________________________