On January 1, 2021, BENI Co. issued shares of its P5 par value share capital to acquire all the net assets of PATTY Company, which was liquidated immediately thereafter. Cost of issuing equity instruments amounting to P5,000 were incurred and paid by BENI Co., aside from the indirect acquisition costs amounting P3,000. The Statement c Financial Position for BENI Co. and the Statement of Financial for the combined company under the purchase method are presented below. BENI CO. Combined BENI CO. Combined Cash 100,000 Accounts Payable 180,000 Bonds Payable 220,000 Ordinary Share Capital 175,000 Share Premium 550,000 Retained Earnings 150,000 70,000 40,000 60,000 Accounts Receivable 130,000 160,000 100,000 200,000 Inventory 100,000 240,000 Land 100,000 60,000 420,000 Buildings and Equipment Accumulated Depreciation 400,000 250,000 247,000 150,000 Goodwill 52,000 Shortly after the above information was complied, a fire destroyed the accounting records. You have been employed to determine the fair value of the shares issued by BENI Co. to acquire PATTY.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Determine the fair value of the shares issued by BENI Co. to acquire PATTY.

On January 1, 2021, BENI Co. issued shares of its P5 par value share capital to acquire all the net assets of PATTY
Company, which was liquidated immediately thereafter. Cost of issuing equity instruments amounting to P5,000
were incurred and paid by BENI Co., aside from the indirect acquisition costs amounting P3,000. The Statement of
Financial Position for BENI Co. and the Statement of Financial for the combined company under the purchase
method are presented below.
BENI CO.
Combined
BENI CO. Combined
Cash
100,000 Accounts Payable
180,000 Bonds Payable
220,000 Ordinary Share Capital
70,000
40,000
60,000
Accounts Receivable
130,000
100,000
160,000
Inventory
100,000
200,000
240,000
Land
100,000
175,000 Share Premium
60,000
420,000
550,000 Retained Earnings
Buildings and Equipment
Accumulated Depreciation
400,000
250,000
247,000
150,000
150,000
Goodwill
52,000
Shortly after the above information was complied, a fire destroyed the accounting records. You have been
employed to determine the fair value of the shares issued by BENI Co. to acquire PATTY.
Transcribed Image Text:On January 1, 2021, BENI Co. issued shares of its P5 par value share capital to acquire all the net assets of PATTY Company, which was liquidated immediately thereafter. Cost of issuing equity instruments amounting to P5,000 were incurred and paid by BENI Co., aside from the indirect acquisition costs amounting P3,000. The Statement of Financial Position for BENI Co. and the Statement of Financial for the combined company under the purchase method are presented below. BENI CO. Combined BENI CO. Combined Cash 100,000 Accounts Payable 180,000 Bonds Payable 220,000 Ordinary Share Capital 70,000 40,000 60,000 Accounts Receivable 130,000 100,000 160,000 Inventory 100,000 200,000 240,000 Land 100,000 175,000 Share Premium 60,000 420,000 550,000 Retained Earnings Buildings and Equipment Accumulated Depreciation 400,000 250,000 247,000 150,000 150,000 Goodwill 52,000 Shortly after the above information was complied, a fire destroyed the accounting records. You have been employed to determine the fair value of the shares issued by BENI Co. to acquire PATTY.
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Investments and Financial instruments
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
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education