AA Corporation’s balance sheet as of January 1, 20x4, reflected the following balances: Cash and Receivables P80,000 Accounts payable P40,000 Inventory 120,000 Income tax payable 60,000 Land 70,000 Bonds payable 200,000 Buildings and equipment (net) 480,000 Common stock 250,000 Retained earnings 200,000 Total assets P750,000 Total Liabilities and Eq P750,000 PP Corporation, which had just entered into an active acquisition program, acquired 100 percent of AA’s commons stock on January 2, 20x4, for P576,000. A careful review of the fair value of AA’s assets and liabilities indicated the following: Accounts Book value Fair value Inventory P120,000 P140,000 Land 70,000 60,000 Buildings and equipment (net) 480,000 550,000 Determine the amount of the following: Inventory Building Land Building and equipment Goodwill
AA Corporation’s
Cash and Receivables P80,000 Accounts payable P40,000
Inventory 120,000 Income tax payable 60,000
Land 70,000 Bonds payable 200,000
Buildings and equipment (net) 480,000 Common stock 250,000
Total assets P750,000 Total Liabilities and Eq P750,000
PP Corporation, which had just entered into an active acquisition program, acquired 100 percent of AA’s commons stock on January 2, 20x4, for P576,000. A careful review of the fair value of AA’s assets and liabilities indicated the following:
Accounts Book value Fair value
Inventory P120,000 P140,000
Land 70,000 60,000
Buildings and equipment (net) 480,000 550,000
Determine the amount of the following:
Inventory
Building
Land
Building and equipment
Goodwill
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