Frankie Corporation purchased 100% of Blake Company for P600,000. At that date, Blake Company had the following book values and market values: Book Value Market Value Cash and receivables 60,000 60,000 Inventory 180,000 230,000 Plant Assets (net) 375,000 475,000 Current liabilities (95,000) (95,000) Long-term debt (215,000) (215,000) Common stock (25,000) Retained earnings (280,000) What is the total purchase differential? Select one: a. P205,000 b. P145,000 c. P295,000 d. P-0-

Frankie Corporation purchased 100% of Blake Company for P600,000. At that date, Blake Company had the following book values and market values: Book Value Market Value Cash and receivables 60,000 60,000 Inventory 180,000 230,000 Plant Assets (net) 375,000 475,000 Current liabilities (95,000) (95,000) Long-term debt (215,000) (215,000) Common stock (25,000) Retained earnings (280,000) What is the total purchase differential? Select one: a. P205,000 b. P145,000 c. P295,000 d. P-0-

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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Question

Frankie Corporation purchased 100% of Blake Company for P600,000. At that date, Blake Company had the following book values and market values:

Book Value Market Value

Cash and receivables 60,000 60,000

Inventory 180,000 230,000

Plant Assets (net) 375,000 475,000

Current liabilities (95,000) (95,000)

Long-term debt (215,000) (215,000)

Common stock (25,000)

Retained earnings (280,000)

What is the total purchase differential? Select one: a. P205,000 b. P145,000 c. P295,000 d. P-0-

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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