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 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 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

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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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: A. A debit of P20,000 to the Business Combination Expenses B. A debit of P10,000 to the Share Premium C. A credit of P100,000 to the Ordinary Share Capital D. A debit of P50,000 to the Ordinary Share Capital
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