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On January 2, 2020,P Company purchased the net asset of S Company by paying P850,000 cash and issuing shares of stocks at P3,110,000 fair market value. Book value and fair value data on the Statement of Financial Positions on January 2, 2020 are as follows: P Company Book Value S Company Fair Value Fair Value 4,600,000 1,000,000 1,300,000 1,460,000 Book Value 300,000 980,000 710,000 1,520,000 90,000 3,600,000 300,000 980,000 600,000 1,064,000 80,000 3,024,000 Cash Accounts Receivable 4,600,000 1,000,000 1,500,000 1,800,000 Inventory Building & Equipment, net Goodwill Total 8,900,000 8,360,000 570,000 51 570,000 600,000 960,000 1,470,000 3,600,000 1,000,000 一 Liabilities Share Capital Share Premium Retained Earnings Total 1,000,000 1,600,000 900,000 5,400,000 8,900,000 Pincurred and paid legal and brokerage fees of P25,600 for business combination; share issue costs of P23,000 and P12,000 indirect acquisition costs. It is determinable that contingency fee of P11,800 would be paid within the year. CHAPTER 1: BUSINESS COMBINATION Page 31. The total shareholders' equity after the business combination is a PI0,949,400 b. P7,900,000 c. PI0,937,600 d. PI1,010,000

On January 2, 2020,P Company purchased the net asset of S Company by paying P850,000 cash and issuing shares of stocks at P3,110,000 fair market value. Book value and fair value data on the Statement of Financial Positions on January 2, 2020 are as follows: P Company Book Value S Company Fair Value Fair Value 4,600,000 1,000,000 1,300,000 1,460,000 Book Value 300,000 980,000 710,000 1,520,000 90,000 3,600,000 300,000 980,000 600,000 1,064,000 80,000 3,024,000 Cash Accounts Receivable 4,600,000 1,000,000 1,500,000 1,800,000 Inventory Building & Equipment, net Goodwill Total 8,900,000 8,360,000 570,000 51 570,000 600,000 960,000 1,470,000 3,600,000 1,000,000 一 Liabilities Share Capital Share Premium Retained Earnings Total 1,000,000 1,600,000 900,000 5,400,000 8,900,000 Pincurred and paid legal and brokerage fees of P25,600 for business combination; share issue costs of P23,000 and P12,000 indirect acquisition costs. It is determinable that contingency fee of P11,800 would be paid within the year. CHAPTER 1: BUSINESS COMBINATION Page 31. The total shareholders' equity after the business combination is a PI0,949,400 b. P7,900,000 c. PI0,937,600 d. PI1,010,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On January 2, 2020, P Company purchased the net asset of S Company by paying P850,000 cash and issuing shares of stocks at P3,110,000 fair market value. Book value and fair value data on the Statement of Financial Positions on January 2, 2020 are as follows: S Company Book Value 300,000 980,000 710,000 1,520,000 P Company Fair Value 4,600,000 1,000,000 1,300,000 1,460,000 Book Value Fair Value Cash Accounts Receivable Inventory Building & Equipment, net 4,600,000 1,000,000 1,500,000 1,800,000 300,000 4.9- 980,000 600,000 o 1,064,000 254 80,000 3,024,000 90,000 3,600,000 Goodwill Total 8,900,000 8,360,000 570,000 s1a 1,000,000 1,600,000 900,000 570,000 600,000 960,000 1,470,000 3,600,000 Liabilities 1,000,000 Share Capital Share Premium Retained Eamings 5,400,000 8,900,000 Total Pincurred and paid legal and brokernge fees of P25,600 for business combination; share issue costs of P23,000 and P12,000 indirect acquisition costs. It is determinable that contingency fee of P11,800 would be paid within the year. CHAPTER 1: BUSINESS COMBINATION Page 54 31. The total sharecholders' equity after the business combination is a P10,949,400 b. P7,900,000 c. PI0,937,600 d. PI1,010,000
Transcribed Image Text:On January 2, 2020, P Company purchased the net asset of S Company by paying P850,000 cash and issuing shares of stocks at P3,110,000 fair market value. Book value and fair value data on the Statement of Financial Positions on January 2, 2020 are as follows: S Company Book Value 300,000 980,000 710,000 1,520,000 P Company Fair Value 4,600,000 1,000,000 1,300,000 1,460,000 Book Value Fair Value Cash Accounts Receivable Inventory Building & Equipment, net 4,600,000 1,000,000 1,500,000 1,800,000 300,000 4.9- 980,000 600,000 o 1,064,000 254 80,000 3,024,000 90,000 3,600,000 Goodwill Total 8,900,000 8,360,000 570,000 s1a 1,000,000 1,600,000 900,000 570,000 600,000 960,000 1,470,000 3,600,000 Liabilities 1,000,000 Share Capital Share Premium Retained Eamings 5,400,000 8,900,000 Total Pincurred and paid legal and brokernge fees of P25,600 for business combination; share issue costs of P23,000 and P12,000 indirect acquisition costs. It is determinable that contingency fee of P11,800 would be paid within the year. CHAPTER 1: BUSINESS COMBINATION Page 54 31. The total sharecholders' equity after the business combination is a P10,949,400 b. P7,900,000 c. PI0,937,600 d. PI1,010,000
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