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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
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