Preferred shares: P14,560 Goodwill: P1,728,000Preferred shares: P17,280 Goodwill: P576,000Preferred shares: P11,520 Goodwill: P576,000Preferred shares: P5,760 Goodwill: P1,728,000*correction: investment fmv is referring to inventory Dodosolsol Inc., a new corporation formed and organized of the recent consolidation of Lalasol Inc. and Star In.,shall issue 10% participating preferred stocks with a par value of P100 for Lalasol and Star net assets contributions,and common shares with a par value of P50 for the difference between the total shares to be issued and thepreferred shares to be issued. The total shares to be issued Dodosolsol shall be equivalent to average annualearnings capitalized at 10%. Relevant data on Lalasol and Star follows:LalasolP1,440,000864,00092,160StarTotal AssetsP1,843,200691,200138,240Total LiabilitiesAnnual Earnings (average)The total preferred shares to be issued and the amount of goodwill to be recognized by Dodosolsol are:

Goodwill is the amount of consideration over the net identifiable assets. Consideration is the total…

Preferred shares: P14,560 Goodwill: P1,728,000 Preferred shares: P17,280 Goodwill: P576,000 Preferred shares: P11,520 Goodwill: P576,000 Preferred shares: P5,760 Goodwill: P1,728,000 *correction: investment fmv is referring to inventory

Preferred shares: P14,560 Goodwill: P1,728,000 Preferred shares: P17,280 Goodwill: P576,000 Preferred shares: P11,520 Goodwill: P576,000 Preferred shares: P5,760 Goodwill: P1,728,000 *correction: investment fmv is referring to inventory

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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Question

100%

Preferred shares: P14,560 Goodwill: P1,728,000

Preferred shares: P17,280 Goodwill: P576,000

Preferred shares: P11,520 Goodwill: P576,000

Preferred shares: P5,760 Goodwill: P1,728,000

*correction: investment fmv is referring to inventory

Dodosolsol Inc., a new corporation formed and organized of the recent consolidation of Lalasol Inc. and Star In.,
shall issue 10% participating preferred stocks with a par value of P100 for Lalasol and Star net assets contributions,
and common shares with a par value of P50 for the difference between the total shares to be issued and the
preferred shares to be issued. The total shares to be issued Dodosolsol shall be equivalent to average annual
earnings capitalized at 10%. Relevant data on Lalasol and Star follows:
Lalasol
P1,440,000
864,000
92,160
Star
Total Assets
P1,843,200
691,200
138,240
Total Liabilities
Annual Earnings (average)
The total preferred shares to be issued and the amount of goodwill to be recognized by Dodosolsol are:

Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.

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