If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition:
REQUIREMENTS: Consolidated Equity at the date of acquisition
Transcribed Image Text:PROBLEM 2
ABC Co. is acquiring XYZ Inc. XYZ has the following unrecorded intangible assets:
Patent on a product P10,000.
Customer list with an observable fair value of P50,000.
A 5-year operating lease with favorable terms with a discounted present value of P8,000.
Skilled workforce, P150,000
Identifiable R&D of P100,000
Advertising contracts, P12,000.
ABC will record how much for acquired Intangible Assets from the purchase of XYZ Inc.?
Transcribed Image Text:The following balances were taken from the trial balance of CARDO Company and SYANO Company at the
start of the fiscal year 20x7:
CARDO COMPANY
Book Value
Fair Value
Book Value
Fair Value
Accounts Payable
P450,000
200,000
595,000
260,000
Cash
P500,000
P500,000
240,000 Mortgage Payable
200,000 Ordinary Shares
520,000 Retained Earnings
P440,000
220,000
250,000
155,000
600,000
Accounts Receivable
LO
Inventory
Fixed Assets (Net)
SYANO COMPANY
Book Value
Fair Value
Book Value
Fair Value
Accounts Payable
P340,000
220,000
Cash
P300,000
150,000
125,000
400,000
P300,000
160,000 Mortgage Payable
100,000 Ordinary Shares
420,000 Retained Earnings
P350,000
200,000
250,000
175,000
Accounts Receivable
Inventory
Fixed Assets (Net)
RST
Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.
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