Petron Company issued 80,000 new shares of its P5 par value ordinary shares valued at P12 per share in exchange for 100,000 outstanding shares (P2 par value) of Shell Company on March 31, 2021. The fair value and book value of Shell's identifiable assets and liabilities were the same except Inventory which was overstated by P50,000 and Equipment which was understated by P100,000. The financial statements of Petron and Shell were (see image below). Petron also agreed to pay P500,000 one year after the acquisition date if the net income of Shell will exceed P10,000,000. The fair value of the contingent consideration is P300,000. Petron incurred the following costs: Finder's Fee - 20,000; Professional Fee - 60,000; Other Indirect Cost 10,000 and Printing and Registration of Shares - 5,000. How much is the goodwill/gain on bargain purchase if NCI is measured using proportionate share? Cash Accounts Receivable Inventory Equipment Total Accounts Payable Share Capital Share Premium Retained Earnings Total Petron 75,000 160,000 200,000 1,675,000 2,110,000 800,000 600,000 450,000 260,000 2,110,000 Shell 60,000 200,000 250,000 875,000 1,385,000 485,000 250,000 50,000 600,000 1,385,000

Petron Company issued 80,000 new shares of its P5 par value ordinary shares valued at P12 per share in exchange for 100,000 outstanding shares (P2 par value) of Shell Company on March 31, 2021. The fair value and book value of Shell's identifiable assets and liabilities were the same except Inventory which was overstated by P50,000 and Equipment which was understated by P100,000. The financial statements of Petron and Shell were (see image below). Petron also agreed to pay P500,000 one year after the acquisition date if the net income of Shell will exceed P10,000,000. The fair value of the contingent consideration is P300,000. Petron incurred the following costs: Finder's Fee - 20,000; Professional Fee - 60,000; Other Indirect Cost 10,000 and Printing and Registration of Shares - 5,000. How much is the goodwill/gain on bargain purchase if NCI is measured using proportionate share? Cash Accounts Receivable Inventory Equipment Total Accounts Payable Share Capital Share Premium Retained Earnings Total Petron 75,000 160,000 200,000 1,675,000 2,110,000 800,000 600,000 450,000 260,000 2,110,000 Shell 60,000 200,000 250,000 875,000 1,385,000 485,000 250,000 50,000 600,000 1,385,000

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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Petron Company issued 80.000 new shares of its P5 par value ordinary shares valued at P12 per share in exchange for 100,000 outstanding shares (P2 par value) of Shell Company on March 31, 2021. The fair value and book value of Shell's identifiable assets and liabilities were the same except Inventory which was overstated by P50.000 and Equipment which was understated by P100,000. The financial statements of Petron and Shell were (see image below). Petron also agreed to pay P500,000 one year after the acquisition date if the net income of Shell will exceed P10,000,000. The fair value of the contingent consideration is P300,000. Petron incurred the following costs: Finder's Fee - 20,000; Professional Fee - 60,000; Other Indirect Cost - 10,000 and Printing and Registration of Shares - 5,000. How much is the goodwill/gain on bargain purchase if NCI is measured using fair value? Petron Shell 75,000 160,000 200,000 1,675,000 2,110,000 60,000 200,000 250,000 875,000 1,385,000 Cash Accounts…
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…
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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
33 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 Inventory which was overvalued by P100,000. Assuming that P Company is an SME. How much is the total assets after business combination? 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 Share Premium Retained Earnings Total 2,770,000
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28 On February 28, 2022, P Corp. purchased 80% of S Co.’s P10 par ordinary shares for P986,000. On this date, the carrying amount of S’s net assets was P1,000,000. The fair values of S Co.’s identifiable assets and liabilities were the same as their carrying amounts except for inventory which is overvalued by P15,000 and plant assets (net), which were P120,000 in excess of the carrying amount. The estimated remaining life of the asset is 5 years. For the year ended December 31, 2022, S had net income of P354,000 and paid cash dividends to P Corp. of P112,000 (all coming from post-acquisition Retained Earnings). Loss on impairment of goodwill in 2022 amounted to P20,000. P Corp. uses the fair value method in measuring non-controlling interest. Revenues were earned evenly throughout the year Determine the non-controlling interest in net asset of subsidiary on December 31, 2022.
On January 1, 2021, PingPing Corp. acquired all the assets and liabilities of Willy Corp. by issuing shares of P10 par value ordinary shares. PingPing Corp. shares has a market value of P40 per share. The statement of financial position of Willy Corp. as of January 1, 2021, is as follows: Current assets – P640,000; Equipment – P1,760,000; Liabilities – P800,000; Common shares (P4 par) – P160,000; Share premium – P640,000; Retained earnings – P800,000. The current assets and equipment have fair values of P800,000 and P3,200,000, respectively. PinPing Corp. issued sufficient number of shares so that the fair market values of the shares issued is equal to the fair market value of Willy Corp.’s net assets. How many ordinary shares should PingPing Corp. must issue to have a gain on bargain purchase of P200,000? *... a. 85,000 shares b. 74,000 shares c. 75,000 shares d. 84,000 shares pls. answer it asap. thank you
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On 30 June 2020 Pink Ltd acquired all assets (except for cash) and assumed all liabilities (except for debentures) of Purple Ltd. At this date, the carrying amounts of assets and liabilities of Purple Ltd were at fair value and consisted of: $15,000 32,000 40,000 Cash Accounts payable $9,000 Accounts receivable Debentures (10%) Share capital ($2 shares) Retained earnings 40,000 Inventory 110,000 Shares in listed companies 90,000 48,000 Motor Vehicle 45,000 Accumulated depreciation (15,000) In exchange for these net assets, Pink Ltd agreed to: issue two (2) Pink Ltd shares for every five (5) shares in Purple Ltd. On 30 June 2020 Pink Ltd shares were valued at $5.50 provide sufficient additional cash in order for Purple Ltd to pay out the debentures (including interest) and liquidation costs of $3,500. Required: Prepare an acquisition analysis for Pink Ltd's acquisition of Purple Ltd. wwww
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