Acquirer Company purchased the net asset of Acquiree Company (excluding cash) by paying P250,000 cash, issuing shares with a fair value of P1,810,000 and issuing a bond debenture with a fair value of P380,000 on January 2, 2022. The financial statements of Acquirer and Acquiree as of this date were as follows (see image below). The book value reflected the fair value of the assets and liabilities except that the inventory of Acquirer had a fair value of 1,500,000 and the inventory and equipment of Acquiree had fair values of P750,000 and P1,400,000 respectively. Acquirer also incurred the following costs: Finder’s fee – P10,000; Accountant’s fee – P15,000; Legal fees – P7,500; Printing of stock certificates – P5,000; and Audit and accountant’s fee related to stock issuance – P20,000. Acquirer only paid 50% of the said acquisition related costs. Answer the following: a. How much is the Consolidated Equity? b. How much is the Goodwill/Gain on Bargain Purchase? c. How much is the Consolidated Liability?
Acquirer Company purchased the net asset of Acquiree Company (excluding cash) by paying P250,000 cash, issuing shares with a fair value of P1,810,000 and issuing a bond debenture with a fair value of P380,000 on January 2, 2022. The financial statements of Acquirer and Acquiree as of this date were as follows (see image below).
The book value reflected the fair value of the assets and liabilities except that the inventory of Acquirer had a fair value of 1,500,000 and the inventory and equipment of Acquiree had fair values of P750,000 and P1,400,000 respectively. Acquirer also incurred the following costs: Finder’s fee – P10,000; Accountant’s fee – P15,000; Legal fees – P7,500; Printing of stock certificates – P5,000; and Audit and accountant’s fee related to stock issuance – P20,000. Acquirer only paid 50% of the said acquisition related costs.
Answer the following:
a. How much is the Consolidated Equity?
b. How much is the
c. How much is the Consolidated Liability?
Step by step
Solved in 2 steps
