Gumiho Corporation acquired Forest Company through an exchange of common shares. All of Forest's assets and liabilities were immediately transferred to Gumiho. Gumiho's common stock was trading at P20 per share at the time of exchange. Following selected information is also available. Before Acquisition P400,000 After Acquisition P500,000 Par value of shares outstanding Additional Paid-in Capital P700,000 P1,100,000 Based on the proceeding information, what is the number of shares was issued at the time of the exchange? 25,000 35,000 20,000 10,000
Gumiho Corporation acquired Forest Company through an exchange of common shares. All of Forest's assets and liabilities were immediately transferred to Gumiho. Gumiho's common stock was trading at P20 per share at the time of exchange. Following selected information is also available. Before Acquisition P400,000 After Acquisition P500,000 Par value of shares outstanding Additional Paid-in Capital P700,000 P1,100,000 Based on the proceeding information, what is the number of shares was issued at the time of the exchange? 25,000 35,000 20,000 10,000
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 1BCRQ
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![Gumiho Corporation acquired Forest Company through an exchange of common shares. All of Forest's assets
and liabilities were immediately transferred to Gumiho. Gumiho's common stock was trading at P20 per share at
the time of exchange. Following selected information is also available.
Par value of shares outstanding
Additional Paid-in Capital
Before Acquisition
P400,000
P700,000
After Acquisition
P500,000
P1,100,000
Based on the proceeding information, what is the number of shares was issued at the time of the exchange?
25,000
35,000
20,000
10,000
The Alhambra Company had these accounts at the time it was acquired by Kingdom Co.:
Cash
P 108,000
Accounts Receivable
1,371,000
Inventories
360,000
PPE
1,948,200
Accounts Payable
1,052,400
Kingdom Co. paid P4,200,000 for net assets of Alhambra Company. It has determined the fair market values
of investment and PPE were P399,000 and P2,700,000, respectively.
An assumed contingent liability arising from past events with a fair value amounting to P30,000 and such
amount is considered a reliable measurement.
In the books of Kingdom Co., this transaction resulted in:
Current Assets increased by P704,400
Retained Earnings increased by P704,400
Goodwill recorded at P704,400
Goodwill recorded at P1,324,200](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F997d932c-e9d5-45b7-a60e-f1187a0613f5%2F04c59fbc-73df-449c-a434-f1d3b2417876%2Foxerw3_processed.png&w=3840&q=75)
Transcribed Image Text:Gumiho Corporation acquired Forest Company through an exchange of common shares. All of Forest's assets
and liabilities were immediately transferred to Gumiho. Gumiho's common stock was trading at P20 per share at
the time of exchange. Following selected information is also available.
Par value of shares outstanding
Additional Paid-in Capital
Before Acquisition
P400,000
P700,000
After Acquisition
P500,000
P1,100,000
Based on the proceeding information, what is the number of shares was issued at the time of the exchange?
25,000
35,000
20,000
10,000
The Alhambra Company had these accounts at the time it was acquired by Kingdom Co.:
Cash
P 108,000
Accounts Receivable
1,371,000
Inventories
360,000
PPE
1,948,200
Accounts Payable
1,052,400
Kingdom Co. paid P4,200,000 for net assets of Alhambra Company. It has determined the fair market values
of investment and PPE were P399,000 and P2,700,000, respectively.
An assumed contingent liability arising from past events with a fair value amounting to P30,000 and such
amount is considered a reliable measurement.
In the books of Kingdom Co., this transaction resulted in:
Current Assets increased by P704,400
Retained Earnings increased by P704,400
Goodwill recorded at P704,400
Goodwill recorded at P1,324,200
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