Homework Help is Here – Start Your Trial Now!
Business
Accounting
10. Red Corporation will issue ordinary shares with a par value P10 for the net assets of Blue Company. Red's ordinary share has a current market value of P40 per share. Blue's statement of financial position on the date of acquisition follow: P320,000 Current assets Property and equipment Liabilities Common stock, P5 par P80,000 880,000 Additional paid in capital 320,000 400,000 400,000 Retained eamings Blue's current assets are appraised at P400,000 and the property and equipment were appraised at P1,600,000. Its liabilities are fairly valued. Accordingly, Red Corporation issued shares of its common stock with a total market value cqual to that of Blue's net assets including goodwill. CHAPTER 1: BUSINESS COMBINATION Page| To recognize goodwill of P200,000, how many shares were to be issued by Red? a 55,000 shares b. 45,000 shares c. 40,000 shares d. 50,000 shares

10. Red Corporation will issue ordinary shares with a par value P10 for the net assets of Blue Company. Red's ordinary share has a current market value of P40 per share. Blue's statement of financial position on the date of acquisition follow: P320,000 Current assets Property and equipment Liabilities Common stock, P5 par P80,000 880,000 Additional paid in capital 320,000 400,000 400,000 Retained eamings Blue's current assets are appraised at P400,000 and the property and equipment were appraised at P1,600,000. Its liabilities are fairly valued. Accordingly, Red Corporation issued shares of its common stock with a total market value cqual to that of Blue's net assets including goodwill. CHAPTER 1: BUSINESS COMBINATION Page| To recognize goodwill of P200,000, how many shares were to be issued by Red? a 55,000 shares b. 45,000 shares c. 40,000 shares d. 50,000 shares

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Pls answer and provide solution and explanation. Thank youuu

10. Red Corporation will issue ordinary shares with a par value P10 for the net assets of Blue Company. Red's ordinary share has a current market value of P40 per share. Blue's statement of financial position on the date of acquisition follow: Current assets Property and equipment lu Liabilities P320,000 Common stock, PS par P80,000 880,000 Additional paid in capital 320,000 400,000 400,000 Retained earnings Blue's current assets are appraised at P400,000 and the property and equipment were appraised at P1,600,000, Its liabilities are fairly valued. Accordingly, Red Corporation issued shares of its common stock with a total market value equal to that of Blue's net assets including goodwill. CHAPTER 1: BUSINESS COMBINATION Page | 46 To recognize goodwill of P200,000, how many shares were to be issued by Red? a. 55,000 shares b. 45,000 shares c. 40,000 shares d. 50,000 shares 11. On May 31,2020, Genesis Company has assets and liabilities with the following fair values: Current Assets - P180,000; Non-Current Assets - P220,000; Liabilities – P40,000. On June 1, 2020, Judges Corporation purchased the net assets of Genesis for P310,000 cash. In the books of Judges, the acquisition resulted to: a. Gain recognized in the P/L amounting to P50,000 b. Goodwill recognized in the balance sheet amounting to 50,000 c. Gain recognized in the OCI amounting to P50,000 d. Decrease in current assets of P50,000
Transcribed Image Text:10. Red Corporation will issue ordinary shares with a par value P10 for the net assets of Blue Company. Red's ordinary share has a current market value of P40 per share. Blue's statement of financial position on the date of acquisition follow: Current assets Property and equipment lu Liabilities P320,000 Common stock, PS par P80,000 880,000 Additional paid in capital 320,000 400,000 400,000 Retained earnings Blue's current assets are appraised at P400,000 and the property and equipment were appraised at P1,600,000, Its liabilities are fairly valued. Accordingly, Red Corporation issued shares of its common stock with a total market value equal to that of Blue's net assets including goodwill. CHAPTER 1: BUSINESS COMBINATION Page | 46 To recognize goodwill of P200,000, how many shares were to be issued by Red? a. 55,000 shares b. 45,000 shares c. 40,000 shares d. 50,000 shares 11. On May 31,2020, Genesis Company has assets and liabilities with the following fair values: Current Assets - P180,000; Non-Current Assets - P220,000; Liabilities – P40,000. On June 1, 2020, Judges Corporation purchased the net assets of Genesis for P310,000 cash. In the books of Judges, the acquisition resulted to: a. Gain recognized in the P/L amounting to P50,000 b. Goodwill recognized in the balance sheet amounting to 50,000 c. Gain recognized in the OCI amounting to P50,000 d. Decrease in current assets of P50,000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Secondary Mortgage Market
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS