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Regular journal entry to record the business combination transaction.

Regular journal entry to record the business combination transaction.

FINANCIAL ACCOUNTING
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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The following are the balance sheet of FAR and SAR Co. when P decided to acquire 4,500 SHARES of S for P577,800: FAR SAR Company Company 850,000 200,000 600,000 1,260,000 2,910,000 300,000 2,000,000 400,000 210,000 2,910,000 50,000 100,000 200,000 450,000 800,000 200,000 500,000 Cash Receivables Inventories Plant and equipment Total Liabilities Share capital, par P100 Share premium Retained earnings 100,000 800,000 Total Assume that FAR acquired the 4,500 shares of stocks of SAR by issuing 5,000 of its shares with a market value of P115.56 and on this date the market values of S inventories and PPE are P210,000 and P470,000 respectively. (Use Full Goodwill Method) 1. Regular journal entry to record the business combination transaction. 2. Working paper adjustment and elimination entry for consolidation purposes.
Transcribed Image Text:The following are the balance sheet of FAR and SAR Co. when P decided to acquire 4,500 SHARES of S for P577,800: FAR SAR Company Company 850,000 200,000 600,000 1,260,000 2,910,000 300,000 2,000,000 400,000 210,000 2,910,000 50,000 100,000 200,000 450,000 800,000 200,000 500,000 Cash Receivables Inventories Plant and equipment Total Liabilities Share capital, par P100 Share premium Retained earnings 100,000 800,000 Total Assume that FAR acquired the 4,500 shares of stocks of SAR by issuing 5,000 of its shares with a market value of P115.56 and on this date the market values of S inventories and PPE are P210,000 and P470,000 respectively. (Use Full Goodwill Method) 1. Regular journal entry to record the business combination transaction. 2. Working paper adjustment and elimination entry for consolidation purposes.
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