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FINANCIAL ACCOUNTING
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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P Company, an SME, issued 120,000 shares of P25 par value ordinary shares for all the outstanding stock of S Company in business consummated on July 1, 2022. P Company's ordinary shares were selling at P40 per share at the time of consummation of the combination. The book value of S net assets was P3.8M. out of pocket costs of combination were as follows: (1) Legal fees for business combination - P12,000 (2) Legal fees for SEC registration - 14,500 (3) SEC registration costs - 18,200 (4) Printing costs of share certificates - 9,400 (5) Finder's fees - 27,000 (6) CPA audit fees for SEC registration in #3 - 19,000 How much is the capitalized cost of investment? *
Transcribed Image Text:P Company, an SME, issued 120,000 shares of P25 par value ordinary shares for all the outstanding stock of S Company in business consummated on July 1, 2022. P Company's ordinary shares were selling at P40 per share at the time of consummation of the combination. The book value of S net assets was P3.8M. out of pocket costs of combination were as follows: (1) Legal fees for business combination - P12,000 (2) Legal fees for SEC registration - 14,500 (3) SEC registration costs - 18,200 (4) Printing costs of share certificates - 9,400 (5) Finder's fees - 27,000 (6) CPA audit fees for SEC registration in #3 - 19,000 How much is the capitalized cost of investment? *
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