PROBLEM IOn January 2, 2020, P Company purchased the net assets of S Company by paying P850,000 cash and issuing shares of stocks atP3,110,000 fair market value. Book value and fair value data on the Statement of Financial Position on January 2, 2020 are as follows:P CompanyS CompanyBook Value4,600,0001,000,0001,500,0001,800,000Fair Value4,600,0001,000,0001,300,0001,460,000Book Value300,000980,000710,0001,520,00090,0003,600,000 3,024,000Fair Value300,000980,000600,0001,064,00080,000CashAccounts ReceivableInventoryBuilding, netGoodwillTotal8,900,0008,360,000LiabilitiesShare CapitalShare PremiumRetained EarningsTotal1,000,0001,600,0001,000,000570,000900,0005,400,0008,900,000570,000600,000960,0001,470,0003,600,000P incurred and paid legal and brokerage fees of P25,600 for business combination; share issue costs of P23,000 indirect acquisition costs.It is determinable that contingency fee of P11,800 would be paid within the year.1. The total assets after the business combination is2. The total shareholder's equity after the business combination is

Answered: Image /qna-images/answer/aec8f140-5808-434d-afe0-72cf11d9741b.jpg

PROBLEM I On January 2, 2020, P Company purchased the net assets of S Company by paying P850,000 cash and issuing shares of stocks at P3,110,000 fair market value. Book value and fair value data on the Statement of Financial Position on January 2, 2020 are as follows: P Company S Company Fair Value Book Value 4,600,000 1,000,000 1,500,000 1,800,000 Fair Value 4,600,000 1,000,000 1,300,000 1,460,000 Book Value Cash Accounts Receivable Inventory Building, net Goodwill Total 300,000 980,000 710,000 1,520,000 90,000 3,600,000 3,024,000 300,000 980,000 600,000 1,064,000 80,000 8,900,000 8,360,000 Liabilities Share Capital Share Premium Retained Earnings Total 1,000,000 1,600,000 900,000 5,400,000 8,900,000 1,000,000 570,000 600,000 960,000 1,470,000 3,600,000 570,000 P incurred and paid legal and brokerage fees of P25,600 for business combination; share issue costs of P23,000 indirect acquisition costs. It is determinable that contingency fee of P11,800 would be paid within the year. 1. The total assets after the business combination is 2. The total shareholder's equity after the business combination is

PROBLEM I On January 2, 2020, P Company purchased the net assets of S Company by paying P850,000 cash and issuing shares of stocks at P3,110,000 fair market value. Book value and fair value data on the Statement of Financial Position on January 2, 2020 are as follows: P Company S Company Fair Value Book Value 4,600,000 1,000,000 1,500,000 1,800,000 Fair Value 4,600,000 1,000,000 1,300,000 1,460,000 Book Value Cash Accounts Receivable Inventory Building, net Goodwill Total 300,000 980,000 710,000 1,520,000 90,000 3,600,000 3,024,000 300,000 980,000 600,000 1,064,000 80,000 8,900,000 8,360,000 Liabilities Share Capital Share Premium Retained Earnings Total 1,000,000 1,600,000 900,000 5,400,000 8,900,000 1,000,000 570,000 600,000 960,000 1,470,000 3,600,000 570,000 P incurred and paid legal and brokerage fees of P25,600 for business combination; share issue costs of P23,000 indirect acquisition costs. It is determinable that contingency fee of P11,800 would be paid within the year. 1. The total assets after the business combination is 2. The total shareholder's equity after the business combination is

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

Property dividends KAKAYANIN Company owns 15% of the outstanding ordinary shares of KHO Corp. On November 1, 2021, KHO declared its inventory as property dividends. Data relating to the fair values of the inventory follow: Date Total Fair Values of Property Dividends November 1, 2021 250,000 December 31, 2021 450,000 February 15, 2022 410,000 How much is the dividend income to be recognized in 2021? Prepare all the necessary entries at the date of declaration, date of record and date of payment.
Question 1 (a)
Question 1 Ewig Berhad acquired 800, 000 out of the 1, 000, 000 RM1 ordinary shares of Leben Berhad on 1 January 2020 for RM900, 000 cash. The general reserves and retained earnings of Leben Berhad at the date of acquisition were RM400, 000 and RM250, 000 respectively. Required: (a) What is the percentage of acquisition by Ewig Berhad? (b) What is the corporate relationship in this situation? (c) Based on MFRS 10, briefly explain whether Ewig Berhad exercises control over Leben Berhad. (d) Assuming the proportional net asset method is used, what is the fair value of the NCI? (e) What is the goodwill or bargain purchase?
Multiple Choice a. $900. b. $1,400. c. $1,900. d. $2,400. e. $2,600.
5 MC Questions On 1 July 2019, Peter Limited acquired all the issued shares of Kerri Limited for $100 000 when the equity of Kerri Limited consisted of: Share capital $70 000 Retained earnings 30 000 The pre-acquisition entry at 1 July 2019 is: a. Shares in Kerri Limited Dr 100 000 Retained earnings Cr 30 000 Share capital Cr 70 000 b. Retained earnings Dr 30 000 Share capital Dr 70 000 Shares in Kerri Limited Cr 100 000 c. Retained earnings Dr 70 000 Share capital Dr 30 000 Shares in Kerri Limited Cr 100 000 d. Goodwill Dr 30 000 Share capital Dr 70 000 Shares in Kerri Limited Cr 100 000
Grace Inc. purchase Charm Inc. Their condensed balance sheets before combination show: Grace Charm Book Value Fair ValueASSETS 14,000,000 1,750,000 1,900,000Liabilities 9,975,000 614,000Ordinary Share, P100 par 5,250,000 875,000Share Premium 436,000Retained Earnings (deficit) -1,225,000 -175,000Liabilities and SHE 14,000,000 1,750,000 Grace issued its own debt and equity securities as a consideration for the net identifiable asset of Charm. Grace incurred P50,000 in issuing its P600,000 par bonds and P60,000 in issuing its P500,000 par shares of stock. Grace bonds is currently selling at 97 while its share of stock is at 120. How much is the total…
Answer with solution/explanation
q4
Correct
Problem 7: In January 2020, Golden Company invested in P900,000 equity securities representing 15% interest in Rings Company. Golden Company incurred transaction cost of P100,000. On December 31, 2020, this investment has a market value of P950,000. On July 1, 2021, Golden Company sold all the investments for P1,200,000. 7.1 What amount of gain on sale should Golden Company recognize in profit or loss assuming the security was classified as Investment at FVPL? 7.2 How much is the amount transferred to Retained earnings upon sale assuming the security was classified as Investment at FVOCI? 7.3 Prepare all the necessary journal entries.
BUSINESS COMBINATION Answer it with solution:
1 16 On January 1, 2024, Clor-Proell Enterprises bought 20% of the outstanding common stock of Chen Construction Company for $600 million cash. Chen's net income for the year ended December 31, 2024, was $300 million. During 2024, Chen declared and paid cash dividends of $60 million. Clor-Proell recorded the investment as follows: points PURCHASE General Journal ($ in millions) Debit Credit Investment in Chen Construction shares Cash 600 600 eBook NET INCOME Investment in Chen Construction shares (20% x $300 million) 60 Investment revenue 60 DIVIDENDS Hint Cash (20% x $60 million) 12 Investment in Chen Construction shares 12 Required: Print References What would be the pretax amounts related to the investment that Clor-Proell would report in its statement of cash flows for the year ended December 31, 2024? Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Cash outflows should be indicated with a minus sign. Operating activities $ 600 Investing activities…