Platek Enterprises purchases 100 percent of Smith Company for P600,000. At that date Smith Company had the following book value and market values: Accounts Book value Market value Cash and receivables P25,000 P25,000 Inventory 125,000 180,000 Plant assets (net) 300,000 475,000 Current liabilities (60,000) (60,000) Long-term debt (120,000) (120,000) Common stock (15,000) Retained earnings (255,000) What is the total purchase differential (excess of cost over book value)?
Platek Enterprises purchases 100 percent of Smith Company for P600,000. At that date Smith Company had the following book value and market values:
Accounts Book value Market value
Cash and receivables P25,000 P25,000
Inventory 125,000 180,000
Plant assets (net) 300,000 475,000
Current liabilities (60,000) (60,000)
Long-term debt (120,000) (120,000)
Common stock (15,000)
What is the total purchase differential (excess of cost over book value)?
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