25Petron Company issued 5 shares in exchange for each ordinary share of Shell Company (alloutstanding shares) on January 2, 2022. The fair value of Petron's shares on that date was P60while the fair value of Shell's shares was P200. The statement of financial position of bothcompanies before the combination were (see image below).On the same date, the fair value of Petran's identifiable assets and liabilities assumed wasP5,800 and P2,100 respectively while the fair value of Shell's net assets was the same as thecarrying value.How much is the amount of consideration? APetronShellAssets5,50011,50011,500Total5,500Liabilities2,1009005,100Share Capital - 100 sharesShare Capital –- 60 sharesRetained Earnings1,8004,60011,5002,500Total5,500

A business combination is defined as a transaction an event in which an acquirer (an investor…

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 amount of consideration?" Petron Shell Assets 5,500 5,500 11,500 11,500 Total 2,100 900 Liabilities Share Capital - 100 shares Share Capital - 60 shares Retained Earnings 5,100 2,500 5,500 1,800 4,600 11,500 Total

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 amount of consideration?" Petron Shell Assets 5,500 5,500 11,500 11,500 Total 2,100 900 Liabilities Share Capital - 100 shares Share Capital - 60 shares Retained Earnings 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

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

XENON Company merged into URANIUM Company on July 1, 2021. In exchange for the net assets at fair market value of XENON Company amounting to P696,450, URANIUM, issued 68,000 ordinary shares at P9 par value with a market price of P12 per share. Out-of-pockets of the combination were as follows: Legal fees for the contract of business combination P35,600; Audit fee for SEC registration of stock issue P90,000; Printing costs of stock certificates P14,500; Broker’s fee P23,600; Accountant’s fee for pre-acquisition P80,000; Other indirect cost of acquisition P75,000; General and allocated expenses P43,000; Listing fees in issuing new shares P36,000. XENON will pay an additional cash consideration of P455,000 in the event that URANIUM’s net income will be equal or greater than P950,000 for the period ended December 31, 2021. At acquisition date, there is a high probability of reaching the target net income and the fair value of the additional consideration was determined to be P195,000.…
Determine the fair value of consideration transferred on the business combination? How many shares were issued in the business combination?
Gera Corporation owns two financial investments in the shares of listed companies. Details of which are as follows: Investment 1 – Acquired on September 1, 2020, at a cost of P50,000 with a Fair value of P60,000 at year-end for the purpose of trading. Investment 2 - Acquired on August 1, 2020, at a cost of P25,000 to hold indefinitely. Its fair value at year-end is P20,000. What are the amounts to appear in the Statement of Comprehensive Income for the year ended September 30, 2020?
On Jan, 1 2024, NCDA Incorporated purchased 6,000 shares of the outstanding common stock of MT Corporation at acost of $140,000. MT had 30,000 shares of outstanding common stock. The total bok value and total fair value of MT' individual net asets on Jan 1, 2024, are $600,000 and $650,000, respectively. Asume that fair market value increments (i.e., the difference between the fair and book value of Brothers' assets) are depreciated using straight-line over years). The total fair value of hte 30,000 shares of MT's common stock on December 31, 2024, si $760,000. Both companies have a January through December fiscal year. The folowing data pertains ot Mountain Corporation during 2024: Dividends declared and paid, January 1 - December 31: $ 12,000 Netincome, January 1 - December 31: $18,000 1) Assume NCDA wil have significant influence over the financial and operating policies of MT, compute the goodwill (if any) on the acquisition. 2) Prepare the necesary entries of NCDA for 2024 under…
On September 1, FAITH Inc issued 120,000 shares of its P50 par value ordinary share in exchange for land. On the date of the transaction, the fair value of the ordinary shares, evidenced by its quoted market price in the stock exchange, was P120 per share. The fair value of the land on the same date was valued at P10,000,000. The journal entry to record this transaction includes a debit to Land for how much?
On December 1, 2019, PT ABC exchanged 20.000 shares of its Rp10 par value ordinary shares held in treasury for a used machine. The treasury shares were acquired by ABC at a cost of Rp40 per share, and are accounted for under the cost method. On the date of the exchange, the ordinary shares had a fair value of Rp55 per share (the shares were originally issued at Rp30 per share). As a result of this exchange, ABC’s total equity will increase by:
On January 1, 2018, PNB and Allied Bank entered into a contract of merger wherein PNB will issue 100,000 ordinary shares with par value of P10 and quoted price of P20 to the existing shareholders of Allied in exchange for the net assets of Allied Bank. PNB paid acquisition related cost of business combination amounting to P100,000 and stock issuance cost amounting to P200,000. As of December 31, 2017, PNB has total assets with book value of P50M and fair market value of P60M while Allied Bank has total assets with book value of P5M and fair market value of P4M. The amount net assets of Allied Bank on December 31, 2017 is P2.6M. What is the amount of total assets of PNB on January 1, 2018 after the merger? Group of answer choices 54,100,000 64,100,000 65,100,000 55,100,000
On December 1, 2019, PT ABC exchanged 20.000 shares of its Rp10 par value ordinary shares held in treasury for a used machine. The treasury shares were acquired by ABC at a cost of Rp40 per share, and are accounted for under the cost method. On the date of the exchange, the ordinary shares had a fair value of Rp55 per share (the shares were originally issued at Rp30 per share). As a result of this exchange, ABC's total equity will increase by: * Rp900.000. O Rp800.000. Rp200.000. Rp1.100.000.