Answered: latter at P100 par value per share. S…

Business

Accounting

latter at P100 par value per share. S was to give a down payment of 50% with the balance to

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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Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms have no debt outstanding. Firm B Firm T Shares outstanding 5,800 Price per share 1,700 $ 55 $ 25 Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $8,100. Firm T can be acquired for $27 per share in cash or by exchange of stock wherein B offers one of its share for every two of T's shares. Are the shareholders of Firm T better off with the cash offer or the stock offer? O Cash offer is better O hare offer is better At what exchange ratio of B shares to T shares would the shareholders in T be indifferent between the two offers? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 1616.) Exchange ratio
On 1 January 2021, SR Bhd (SRB) purchases two quoted securities from the open market. The details of the purchases are as follows:Price (RM) Commission (RM) 1,000,000 ordinary shares of MA Bhd 2,500,000 10,000 1,000,000 bonds of ABB Bhd 1,000,000 5,000BSB intends to trade these investments and will sell them when their market price increases by about 10% or more. On 31 March 2021, the quoted market price of MA Bhd’s ordinary shares is RM2.10 and the market price of the bonds of ABB Bhd closes at 95 sen per unit. On 30 April 2021, the quoted market price of MA Bhd’s ordinary shares is RM2.80 and the market price of the bonds of ABB Bhd remain the same (closes at 95 sen per unit). SRB decided to sell all units of MA Bhd’s ordinary shares.Required:(i) explain how BSB shall account for the two quoted investments.(ii) provide the journal entries to record the above transactions.
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Ice Shave Entity writes a put option on Dec 31, 20x1 to purchase 5000 shares in exchange for a $5,000 premium. Under the contract, Ice Shave may be required to purchase $100,000 of its own shares two years from now (PV of 82,645). The contract may be settled only under gross physical delivery method. Record all the necessary journal entries.
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XYZ Company merged into UUU Company on July 1, 2021. In exchange for the net assets at fair market value of XYZ Company amounting to P696,450, UUU, issued 68,000 ordinary shares at P9 par value with a market price of P12 per share. Out-of-pockets of the combination were as follows: Legal fees for the contract of business combination P35,600 Audit fee for SEC registration of stock issue P90,000 Printing costs of stock certificates P14,500 Broker's fee P23,600 Accountant's fee for pre-acquisition P80,000 Other indirect cost of acquisition P75,000 General and allocated expenses P43,000 Listing fees in issuing new shares P36,000 XYZ will pay an additional cash consideration of P455,000 in the event that UUU's net income will be equal or greater than P950,000 for the period ended December 31, 2021. At acquisition date, there is a high probability of reaching the target net income and the fair value of the additional consideration was determined to be P195,000. Actual net income for the…