On January 1, 20x1, John Corp. acquired the identifiable net assets of Jose Corp. by paying cash of ₱1,500,000 and issuing 10,000 ordinary shares with par and fair value of ₱100 and ₱120 per share, respectively. The identifiable assets of Jose had book values of ₱3,200,000 and fair values of ₱4,000,000 and its liabilities have book values equal to its fair values amounting to ₱1,500,000. As per agreement, John Corp. agreed to pay additional amount equal to 20% of the 20x1 year-end profit that exceeds ₱500,000 on January 2, 20x2. On the date of acquisition Jon estimated that the fair value of contingent consideration is ₱15,000. Assume the actual profit of ABC on December 31, 20x1 is ₱600,000. What is the gain (loss) on extinguishment of contingent consideration liability.

On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000.   The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000.   Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky.   The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…

On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000.   The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000.   Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky.   The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…

On January 1, 20x1, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of ₱15 per share. On this date, XYZ’s equity comprised of ₱50,000 share capital and ₱24,000 retained earnings. NCI was measured at its proportionate share in XYZ’s net identifiable assets. XYZ’s assets and liabilities on January 1, 20x1 approximate their fair values except for the following:   XYZ, Inc.                                    Carrying amounts        Fair values        Fair value adjustments (FVA) Inventory                                            23,000                     31,000                  8,000 Equipment (4 yrs. remaining life)      50,000                     60,000                 10,000 Accumulated depreciation               (10,000)                  (12,000)                 (2,000) Totals                                                 63,000                   79,000                   16,000XYZ, Inc. declared and paid dividends of ₱6,000 during 20x1. There was…