On January 1, 20x4, the Alpha Company entered into a transaction for acquisition of assets and liabilities of Beta Company.Alpha issued P400 in long-term liabilities and 40 shares of ordinary shares having a par value of P1 per share but a fair value of P10 pershare. Alpha paid P20 to lawyers, accountants and brokers for assistance in bringing about this purchase. Another P15 was paid inconnection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows:Item....Alpha .BetaCash..P 180 ..P 40Accounts Receivable......810..180Inventory...1,080.. 280Land.. 600.. 360Buildings (net)...1,260.. 440Equipment (net)..480... 100.....-Accounts Payable........( 450)..( 80)Long-term liabilities......(1,290)..( 400)Ordinary Shares, P1 par....( 330)Ordinary Shares, P20 par.( 240)Share Premium..( 1,080)..( 340)Retained Earnings.......(1,260).. ( 340)Note: Parentheses indicate a credit balance. In Alpha 's appraisal of Beta, three assets were deemed to be undervalued on the books of Beta: Inventory by P10, Land by P40 andBuildings by P60.(Do not use comma for the answers below on questions, Follow this format: P1 250 000)1. If the transaction is accounted for as an acquisition, what is the amount of consideration transferred? P8002. Compute the amount of inventories after combination.3. Compute the amount of buildings (net) after combination.4. Compute the amount of land after combination.5. Compute the amount of equipment after combination.6. Compute the amount of ordinary shares at after combination,7. Compute the amount of share premium at after combination.8. Compute the amount of cash after combination,

As per Bartleby policy, only the first 3 parts of the interlinked questions are answered.…

1. If the transaction is accounted for as an acquisition, what is the amount of consideration transferred? P800 2. Compute the amount of inventories after combination, 3. Compute the amount of buildings (net)after combination. 4. Compute the amount of land after combination,

1. If the transaction is accounted for as an acquisition, what is the amount of consideration transferred? P800 2. Compute the amount of inventories after combination, 3. Compute the amount of buildings (net)after combination. 4. Compute the amount of land after combination,

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On January 1, 20x4, the Alpha Company entered into a transaction for acquisition of assets and liabilities of Beta Company.
Alpha issued P400 in long-term liabilities and 40 shares of ordinary shares having a par value of P1 per share but a fair value of P10 per
share. Alpha paid P20 to lawyers, accountants and brokers for assistance in bringing about this purchase. Another P15 was paid in
connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows:
Item..
..Alpha .Beta
Cash..
P 180 ..P 40
Accounts Receivable......
810..180
Inventory...
1,080.. 280
Land.
. 600.. 360
Buildings (net)..
.1,260.. 440
Equipment (net)..
480... 100
.....-
Accounts Payable........( 450)..( 80)
Long-term liabilities......(1,290)..( 400)
Ordinary Shares, P1 par....( 330)
Ordinary Shares, P20 par
.( 240)
Share Premium..
( 1,080)..( 340)
Retained Earnings.......(1,260).. ( 340)
Note: Parentheses indicate a credit balance.

In Alpha 's appraisal of Beta, three assets were deemed to be undervalued on the books of Beta: Inventory by P10, Land by P40 and
Buildings by P60.
(Do not use comma for the answers below on questions, Follow this format: P1 250 000)
1. If the transaction is accounted for as an acquisition, what is the amount of consideration transferred? P800
2. Compute the amount of inventories after combination.
3. Compute the amount of buildings (net) after combination.
4. Compute the amount of land after combination.
5. Compute the amount of equipment after combination.
6. Compute the amount of ordinary shares at after combination,
7. Compute the amount of share premium at after combination.
8. Compute the amount of cash after combination,

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