On January 1, 2020, Parent Company issued 10,000 shares of its P5 par ordinary share capital for all the 5,000 issued and outstanding shares of Subsidiary Company's P1 par share capital. The market value of the share was P10. Parent also incurred acquisition related cost amounting to P20,000 including cost of issuing and registering new shares of P10,000. On this date, the shareholder's equity of Subsidiary was: Ordinary Share Capital - 5,000; Paid-In Capital in excess of par - 30,000; and Retained Earnings - 50,000. The journal entry to record the business combination should include: * O O A debit of P10,000 to the Share Premium O A debit of P20,000 to the Business Combination Expenses O A credit of P100,000 to the Ordinary Share Capital O A debit of P50,000 to the Ordinary Share Capital
On January 1, 2020, Parent Company issued 10,000 shares of its P5 par ordinary share capital for all the 5,000 issued and outstanding shares of Subsidiary Company's P1 par share capital. The market value of the share was P10. Parent also incurred acquisition related cost amounting to P20,000 including cost of issuing and registering new shares of P10,000. On this date, the shareholder's equity of Subsidiary was: Ordinary Share Capital - 5,000; Paid-In Capital in excess of par - 30,000; and Retained Earnings - 50,000. The journal entry to record the business combination should include: * O O A debit of P10,000 to the Share Premium O A debit of P20,000 to the Business Combination Expenses O A credit of P100,000 to the Ordinary Share Capital O A debit of P50,000 to the Ordinary Share Capital
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
q11
Transcribed Image Text:On January 1, 2020, Parent Company issued 10,000 shares of its P5 par ordinary share capital
for all the 5,000 issued and outstanding shares of Subsidiary Company's P1 par share capital.
The market value of the share was P10. Parent also incurred acquisition related cost amounting
to P20,000 including cost of issuing and registering new shares of P10,000. On this date, the
shareholder's equity of Subsidiary was: Ordinary Share Capital - 5,000; Paid-In Capital in excess
of par - 30,000; and Retained Earnings - 50,000. The journal entry to record the business
combination should include: * O
O A debit of P10,000 to the Share Premium
O A debit of P20,000 to the Business Combination Expenses
O A credit of P100,000 to the Ordinary Share Capital
O A debit of P50,000 to the Ordinary Share Capital
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education