Parent Company owns 100% of ABC Company's 100,000 shares. ABC issues 25,000 new shares to the public for $9 cash per share and Parent Co. acquires none of the shares. The book value of ABC's net assets before the stock issuance was 445,517. AAP associated with the acquisition of ABC's net assets, updated for AAP amortization to the date of the stock issuance, was 281,783 prior to the stock issuance. What is the amount of the Parent's claim on the net assets of ABC Co. as of the date of the stock issuance?

Parent Company owns 100% of ABC Company's 100,000 shares. ABC issues 25,000 new shares to the public for $9 cash per share and Parent Co. acquires none of the shares. The book value of ABC's net assets before the stock issuance was 445,517. AAP associated with the acquisition of ABC's net assets, updated for AAP amortization to the date of the stock issuance, was 281,783 prior to the stock issuance. What is the amount of the Parent's claim on the net assets of ABC Co. as of the date of the stock issuance?

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter7: Corporations: Reorganizations

Section: Chapter Questions

Problem 43P

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Parent Company owns 100% of ABC Company's 100,000 shares. ABC issues 25,000 new shares to the public for $1 cash per share and Parent Co. acquires none of the shares. The book value of ABC's net assets before the stock issuance was 306,490. AAP associated with the acquisition of ABC's net assets, updated for AAP amortization to the date of the stock issuance, was 184,825 prior to the stock issuance. What is the amount of the increase (for a decrease use a negative sign) in Parent's APIC on the date of the stock issuance?
On May 31,2018, Fedex Company acquired Aramex Company's outstanding stock by paying $400,000 cash and issuing 10,000 shares of its own $30 par value common stock, when the market price was $32 per share. Fedex paid legal and accounting fees amounting to S35,000 in addition to stock issuance costs of $8,000. Aramex is dissolved on the date of the acquisition. Balance sheet information for Fedex and Aramex immediately preceding the acquisition is shown below, including fair values for Aramex's assets and liabilities. Fedex Aramex Aramex Book Value Book Value Fair Value Cash 490,000 $140,000 $140,000 Accounts Receivable 560,000 280,000 280,000 Inventory 520,000 200,000 260,000 Land 460,000 150,000 140,000 Plant Assets - Net 980,000 325,000 355,000 Construction Permits 380,000 170,000 190,000 Accounts Payable Other accrued expenses Notes Payable Common Stock ($30 par) Common Stock ($20 par) (460,000) (160,000) (800,000) (960,000) (140,000) (140,000) (45,000) (45,000) (460,000) (460,000)…
On January 1, 20X2, Parent Inc. issued 32,000 shares of its P10 par value common stock for all the outstanding shares of Son Company. The fair value of Parent Inc.'s stock is P25 per share. Parent Inc. pays P50,000 in registering the stocks. Given below are the statements of financial position (SFP) of the companies before the acquisition: Parent Inc. Statement of Financial Position January 1, 20X2 Assets Liabilities and Equity P200,000 Accounts Payable 185,000 Bonds Payable 190,000 Common Stock, P10 par value 300,000 Additional Paid-In Capital (APIC) 740,000 Retained Earnings 420,000 Total Liabilities and Equity Cash P210,000 420,000 400,000 500,000 505,000 P2,035,000 Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets P2,035,000 Son Company Statement of Financial Position January 1, 20X2 Book Value Fair Value Accounts Receivable P55,000 130,000 85,000 320,000 140,000 P730,000 P55,000 150,000 130,000 500,000 300,000 P1,135,000…
On January 1, 20X2, Parent Inc. issued 32,000 shares of its P10 par value common stock for all the outstanding shares of Son Company. The fair value of Parent Inc.'s stock is P25 per share. Parent Inc. pays P50,000 in registering the stocks. Given below are the statements of financial position (SFP) of the companies before the acquisition: Parent Inc. Statement of Financial Position January 1, 20X2 Assets Liabilities and Equity P210,000 420,000 400,000 500,000 505,000 P2,035,000 Cash P200,000 Accounts Payable 185,000 Bonds Payable 190,000 Common Stock, P10 par value 300,000 Additional Paid-In Capital (APIC) 740,000 Retained Earnings 420,000 Total Liabilities and Equity P2,035,000 Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets Son Company Statement of Financial Position January 1, 20X2 Book Value Fair Value P55,000 150,000 130,000 500,000 300,000 P1,135,000 Accounts Receivable Inventory Land P55,000 130,000 85,000 320,000…
3 Parent Company owns 100% of ABC Company's 100,000 shares. ABC issues 25,000 new shares to the public for $1 cash per share and Parent Co. acquires none of the shares. The book value of ABC's net assets before the stock issuance was 310,000. AAP associated with the acquisition of ABC's net assets, updated for AAP amortization to the date of the stock issuance, was 220,000 prior to the stock issuance. What is the amount of the Parent's claim on the net assets of ABC Co. as of the date of the stock issuance?
P Company acquired the net assets of S Company by issuing 150,000 shares of its P10 par value ordinary share capital on July 1, 2021. The market value of the shares was P12. P also paid direct costs of P100,000 which includes P15,000 cost of issuing and registering new shares. The financial statements of P and S were (see image below). The fair value and book value of S Company's identifiable assets and liabilities were the same except Equipment which was undervalued by P250.000 and lInventory which was overvalued by P100,000. Assuming that P Company is an SME. How much is the goodwill/gain on bargain purchase? " P S Cash Inventory Equipment Other Assets 150,000 320,000 4,350,000 500,000 5,320,000 120,000 400,000 1,750,000 500,000 2,770,000 Total Accounts Payable Notes Payable Share Capital, P10 par 1,000,000 1,300,000 2,000,000 1,000,000 20,000 5,320,000 300,000 660,000 500,000 100,000 1,210,000 2,770,000 Share Premium Retained Earnings Total
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YSL Corporation acquired 80% of the outstanding ordinary shares of GBX Company on June 1, 2022 for P586,250. GBX Company's shareholder's equity components at the end of this year were as follows: Ordinary shares, P100 par, 250,000; Share premium, P112,500 and Retained. earnings, P222,500. Non-controlling interest (NCl) is measured at fair value. All the assets of GBX were fairly valued, except for inventories, which is overstated by P11,000 and equipment, which is understated by 15,000, Remaining useful life of equipment is 4 years. Both companies use straight line method for depreciation and amortization. Shareholder's equity of YSL on January 1, 2022 is composed of Ordinary shares, P750,000; Share premium, P175,000 and Retained earnings, P525,000 Fair value of NCI on the date of acquisition is P117,500. Goodwill, if any, should be written down by P14,225 at year end. Net income for the first year of parent and subsidiary are P75,000 and P42,500 (from date of acquisition),…
Heidebrecht Design acquired 25% of the outstanding common stock of Sunland Company on January 1, 2022, by paying $854,000 for the 42,700 shares. Sunland declared and paid $0.30 per share cash dividends on March 15, June 15, September 15, and December 15, 2022. Sunland reported net income of $390,500 for the year. At December 31, 2022, the market price of Sunland common stock was $26 per share. (a) Prepare the journal entries for Heidebrecht Design for 2022 assuming Heidebrecht Design cannot exercise significant influence over Sunland. (Use the cost method.) (Record journal entries in the order presented in the problem. List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit
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B Co acquired 100% of the voting common shares of SCo, by issuing bonds with a par value and fair value of $75,000. Immediately prior to the acquisition, B reported total assets of $250,000, liabilities of $140,000, and stockholders' equity of $110,000. At that date, S reported total assets of $200,000, liabilities of $125,000, and stockholders' equity of $75,000 Based on the preceding information, what amount of total assets did � report in its balance sheet immediately after the acquisition? Select one: a. 325,000 b. 450,000 c. 375,000 d. 250,000 Answer..
Wooden Reed Inc. (WRI) issued 30,000 voting common shares to acquire all of the assets and liabilities of Creative Instrument Ltd. (CIL). On the acquisition date, WRI's shares were trading at $21.83 per share. After the transaction, CIL owned 20% of WRI's outstanding shares. Below are the statements of financial position of both companies immediately before the transaction, along with the fair values of CIL's assets and liabilities: WRI CIL Cash Accounts receivable Inventory Property, plant, equipment (net) Current liabilities Long-term debt Common shares Retained earnings $754,900 ■ $919,900 $265,000 O $100,000 S carrying value 75,000 CA 180,000 220,000 880,000 $ 1,355,000 $ 75,000 235,000 100,000 945,000 $ 1,355,000 If the consolidated statement of financial position was created immediately after the acquisition, the consolidated 2. common share account will be: A TTİNEN carrying value $ 35,000 TRT- 67,500 10 125,000 S climi 1 temagam de - SAM A TRILOŽ B 350,000 $ 577,500 $ 25,000…