How much is the gain on acquisition as a result of business combination on January 1, 2018?
WAG PAPALOKO Inc. has the following
|
Assets |
Liabilities and Equity |
|||
|
|
79,000 |
Current Liabilities |
145,000 |
|
|
Inventory |
112,000 |
Long-term notes |
100,000 |
|
|
Other current assets |
55,000 |
Ordinary share, P1 par |
50,000 |
|
|
Equipment (net) |
294,000 |
Share premium |
200,000 |
|
|
|
30,000 |
|
75,000 |
|
|
Total assets |
570,000 |
Total liabilities and equity |
570,000 |
On January 1, 2018, WAG PAPATINAG Corp. acquired the net assets of WAG PAPALOKO Inc. by issuing 7,000 shares of its P25 par value common stock. Subsequently, WAG PAPALOKO Inc. was liquidated and its assets and liabilities merged into WAG PAPATINAG Corp. WAG PAPATINAG Corp. and WAG PAPALOKO Inc. stocks were selling for P40 per share and P6 per share, respectively on January 1, 2018.
The book values of WAG PAPALOKO Inc.’s identifiable assets and liabilities equaled their fair values except for the other current assets and equipment (net) of WAG PAPALOKO Inc. which has fair value of 50,000 and P320,000, respectively.
In addition, WAG PAPATINAG Corp. incurred and paid P30,000 of legal and broker’s fees associated with the combination and P10,000 of stock issuance costs.
How much is the gain on acquisition as a result of business combination on January 1, 2018?
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