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Determine the fair value of consideration transferred on the business combination? How many shares were issued in the business combination

Determine the fair value of consideration transferred on the business combination? How many shares were issued in the business combination

FINANCIAL ACCOUNTING
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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  1. Determine the fair value of consideration transferred on the business combination?
  2. How many shares were issued in the business combination?
On January 1, 2021, ABC Co. acquired all of the identifiable assets and assumed all of the liabilities of XYZ, Inc. by issuing its own ordinary shares. Information at acquisition date is shown below: (see image below) Additional information: 1. ABC Co's share capital consists of 60,000 ordinary shares with par value of P40 per share. 2. XYZ's share capital consists of 3,000 ordinary shares with par value of P400 per share. Determine the fair value of consideration transferred on the business combination? АВС Со XYZ Inc Combined (carrying amounts) (fair values) Identifiable assets 9,600,000 6,400,000 16,000,000 Goodwill Total assets 9,600,000 6,400,000 ? Liabilities 2,800,000 2,400,000 3,600,000 6,400,000 2,800,000 Share capital Share premium Retained earnings Total liabilities & equity 1,200,000 1,200,000 3,200,000 9,600,000 1,000,000 600,000 4,800,000 6,400,000 ?
Transcribed Image Text:On January 1, 2021, ABC Co. acquired all of the identifiable assets and assumed all of the liabilities of XYZ, Inc. by issuing its own ordinary shares. Information at acquisition date is shown below: (see image below) Additional information: 1. ABC Co's share capital consists of 60,000 ordinary shares with par value of P40 per share. 2. XYZ's share capital consists of 3,000 ordinary shares with par value of P400 per share. Determine the fair value of consideration transferred on the business combination? АВС Со XYZ Inc Combined (carrying amounts) (fair values) Identifiable assets 9,600,000 6,400,000 16,000,000 Goodwill Total assets 9,600,000 6,400,000 ? Liabilities 2,800,000 2,400,000 3,600,000 6,400,000 2,800,000 Share capital Share premium Retained earnings Total liabilities & equity 1,200,000 1,200,000 3,200,000 9,600,000 1,000,000 600,000 4,800,000 6,400,000 ?
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