Petron Company issued 5 shares in exchange for each crdinary share of Shell Company (all outstanding shares) on January 2, 2022. The fair value of Petron's shares on that date was P60 while the fair value of Shell's shares was P200. The statement of financial position of both companies before the combination were (see image below). On the same date, the fair value of Petron's identifiable assets and liabilities assumed was P5,800 and P2,100 respectively while the fair value of Shell's net assets was the same as the carrying value. How much is the goodwill/gain on bargain purchase? Petron Shell 11,500 11,500 Assets 5,500 5,500 Total Liabilities Share Capital - 100 shares Share Capital - 60 shares Retained Earnings 2,100 900 5,100 2,500 5,500 1,800 4,600 11,500 Total

Petron Company issued 5 shares in exchange for each crdinary share of Shell Company (all outstanding shares) on January 2, 2022. The fair value of Petron's shares on that date was P60 while the fair value of Shell's shares was P200. The statement of financial position of both companies before the combination were (see image below). On the same date, the fair value of Petron's identifiable assets and liabilities assumed was P5,800 and P2,100 respectively while the fair value of Shell's net assets was the same as the carrying value. How much is the goodwill/gain on bargain purchase? Petron Shell 11,500 11,500 Assets 5,500 5,500 Total Liabilities Share Capital - 100 shares Share Capital - 60 shares Retained Earnings 2,100 900 5,100 2,500 5,500 1,800 4,600 11,500 Total

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

30
Petron Company issued 5 shares in exchange for each ordinary share of Shell Company (all
outstanding shares) on January 2, 2022. The fair value of Petron's shares on that date was P60
while the fair value of Shell's shares was P200. The statement of financial position of both
companies before the combination were (see image below).
On the same date, the fair value of Petron's identifiable assets and liabilities assumed was
P5,800 and P2,100 respectively while the fair value of Shell's net assets was the same as the
carrying value.
How much is the gocdwill/gain on bargain purchase?
Petron
Shell
Assets
Total
5,500
5,500
11,500
11,500
Liabilities
2,100
900
5,100
Share Capital - 100 shares
Share Capital - 60 shares
Retained Earnings
1,800
4,600
11,500
2,500
5,500
Total

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