XYZ Company merged into UUU Company on July 1, 2021. In exchange for the net assets atfair market value of XYZ Company amounting to P696,450, UUU, issued 68,00o0 ordinaryshares at P9 par value with a market price of Pi2 per share. Out-of-pockets of thecombination were as follows:Legal fees for the contract of business combination P35,600Audit fee for SEC registration of stock issue P90,000Printing costs of stock certificates P14,500Broker's fee P23,600Accountant's fee for pre-acquisition P80,000Other indirect cost of acquisition P75,000General and allocated expenses P43,000Listing fees in issuing new shares P36,000XYZ will pay an additional cash consideration of P455,000 in the event that UUU's netincome will be equal or greater than P950,000 for the period ended December 31, 2021.At acquisition date, there is a high probability of reaching the target net income and the fairvalue of the additional consideration was determined to be P195,000. Actual net income forthe period ended December 31, 2021 amounted to P1,250,000. The additional cashconsideration was paid.Compute the amount of expense to be recognized in the income statement forthe year ended December 31, 2021.

Name: XYZ Company merged into UUU Company on July 1, 2021. In exchange for
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Description: XYZ Company merged into UUU Company on July 1, 2021. In exchange for the net assets atfair market value of XYZ Company amounting to P696,450, UUU, issued 68,00o0 ordinaryshares at P9 par value with a market price of Pi2 per share. Out-of-pockets of

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Answered: Compute the amount of expense to be…

Business

Accounting

Compute the amount of expense to be recognized in the income statement for the year ended December 31, 2021.

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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