TOOLAD Company TOOLAD Company agreed agreed to pay P850,000 cash and issue 50,000 shares of its P10 par (20 current fair value ashare) ordinary share on September 30, 2021, to OVER Corporation for all the net assets of OVER except cash. Inaddition, TOOLAD agreed that if the fair market value of its ordinary share was not P20 a share or more onSeptember 30, 2022, a sufficient number of additional ordinary shares would be issued to OVER to make theaggregate market value of its TOOLAD ordinary shareholdings equal to P1 million on that date. The statement offinancial position of OVER on September 30, 2021 with related current fair values of assets and liabilities, is asfollows:ВookВookFairFair ValueValueValueValueCash100,000100,000 Current Liabilities700,000 700,000Accounts Receivable, net300,000300,000 Long-term Debt500,000 480,000Merchandise Inventory520,000680,000 Ordinary Share, P5 par600,000Prepaid Expenses20,00020,000 Share Premium400,000Land180,000180,000 Retained Earnings500,000Building500,000650,000Equipment1,000,0001,250,000Other Plant Assets80,000100,000Out-of-pocket costs of the business combination paid by TOOLAD on September 30, 2021, were as follows: Auditfees (SEC registration statement)- P30,000; Finder's Fee-P35,000; Legal Fees (business combination )-P15,000; Legalfees (SEC registration statement)-P20,000; Printing Cost (securities and SEC registration statement)-P25,000; SECregistration fee-P350. Assume that on September 30, 2022, the market value of TOOLAD Corporation's ordinaryshare was P16 a share. Compute the added number of shares to be issued.

Step 1 In business combination, when the number of shares is issued, they are generally issued at…

Out-of-pocket costs of the business combination paid by TOOLAD on September 30, 2021, were as follows: Audit fees (SEC registration statement)- P30,000; Finder's Fee-P35,000; Legal Fees (business combination )-P15,000; Legal fees (SEC registration statement)-P20,000; Printing Cost (securities and SEC registration statement)-P25,000; SEC registration fee-P350. Assume that on September 30, 2022, the market value of TOOLAD Corporation's ordinary share was P16 a share. Compute the added number of shares to be issued.

Out-of-pocket costs of the business combination paid by TOOLAD on September 30, 2021, were as follows: Audit fees (SEC registration statement)- P30,000; Finder's Fee-P35,000; Legal Fees (business combination )-P15,000; Legal fees (SEC registration statement)-P20,000; Printing Cost (securities and SEC registration statement)-P25,000; SEC registration fee-P350. Assume that on September 30, 2022, the market value of TOOLAD Corporation's ordinary share was P16 a share. Compute the added number of shares to be issued.

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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