44. Companies X, Y, and Z, parties to a consolidation, have the following data: X Co. Net assets P400,000 Average annual earnings 60,000 Y Co. P600,000 60,000 Z Co. P1,000,000 80,000 The parties collectively agreed that the new corporation, AA Co. will issue a single class of shares based on the earnings ratio. c. 30:30:40 d. 40:40:20 What is the stock distribution ratio to companies X, Y, and Z, respectively? a. 20:30:50 b. 30:40:30
44. Companies X, Y, and Z, parties to a consolidation, have the following data: X Co. Net assets P400,000 Average annual earnings 60,000 Y Co. P600,000 60,000 Z Co. P1,000,000 80,000 The parties collectively agreed that the new corporation, AA Co. will issue a single class of shares based on the earnings ratio. c. 30:30:40 d. 40:40:20 What is the stock distribution ratio to companies X, Y, and Z, respectively? a. 20:30:50 b. 30:40:30
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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BUSINESS COMBINATION
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Transcribed Image Text:44. Companies X, Y, and Z, parties to a consolidation, have the
following data:
X Co.
Net assets
P400,000
Average annual earnings 60,000
Y Co.
P600,000
60,000
Z Co.
P1,000,000
80,000
The parties collectively agreed that the new corporation, AA Co.
will issue a single class of shares based on the earnings ratio.
a. 20:30:50
b. 30:40:30
c. 30:30:40
d. 40:40:20
What is the stock distribution ratio to companies X, Y, and Z,
respectively?
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