Problem 1-5 In a business combination accounted as an acquisition, Major Corp. issued 200,000; P30 par ordinary shares with a fair value of P8,000,000 in exchange for all of the outstanding common stock of Minor Co. On the acquisition date, Minor had tangible net assets with a carrying amount of P4,000,000 and a fair value of P5,000,000. In addition, Major issued 10,000; P40 par preferred stock valued at P500,000 to an individual as a finder's fee in arranging the transaction. Required: 1. As a result of this transaction, Major should record an increase in net assets of. 2. Journalize the transaction in the books of the acquirer.
Problem 1-5 In a business combination accounted as an acquisition, Major Corp. issued 200,000; P30 par ordinary shares with a fair value of P8,000,000 in exchange for all of the outstanding common stock of Minor Co. On the acquisition date, Minor had tangible net assets with a carrying amount of P4,000,000 and a fair value of P5,000,000. In addition, Major issued 10,000; P40 par preferred stock valued at P500,000 to an individual as a finder's fee in arranging the transaction. Required: 1. As a result of this transaction, Major should record an increase in net assets of. 2. Journalize the transaction in the books of the acquirer.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Problem 1-5
Consl-Sn
In a business combination accounted as an acquisition, Major Corp. issued 200,000; P30 par
ordinary shares with a fair value of P8,000,000 in exchange for all of the outstanding common
stock of Minor Co. On the acquisition date, Minor had tangible net assets with a carrying
amount of P4,000,000 and a fair value of P5,000,000. In addition, Major issued 10,000; P40
par preferred stock valued at P500,000 to an individual as a finder's fee in arranging the
transaction.
Required:
1. As a result of this transaction, Major should record an increase in net assets of:
2. Journalize the transaction in the books of the acquirer.
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