If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P10 par valueshares with a fair value of P20 per share, entered into a mortgage loan of P290,000 and paying directcost and stock issue cost of P50,000 and P20,000 respectively, a P25,000 direct cost and a P50,000indirect cost however remain unpaid.REQUIREMENTS:A. GoodwillB. Consolidated Total Liabilities at the date of acquisition The following balances were taken from the trial balance of CARDO Company and SYANO Company at thestart of the fiscal year 20x7:CARDO COMPANYBook ValueFair ValueBook ValueFair ValueCashAccounts ReceivableAccounts PayableP450,000200,000P500,000250,000155,000600,000P500,000240,000 Mortgage Payable200,000 Ordinary Shares520,000 Retained EarningsP440,000220,000LO595,000260,000InventoryFixed Assets (Net)SYANO COMPANYBook ValueFair ValueBook ValueFair ValueAccounts PayableP350,000200,000250,000175,000P340,000220,000CashP300,000150,000125,000400,000P300,000160,000 Mortgage Payable100,000 Ordinary Shares420,000 Retained EarningsAccounts ReceivableInventoryFixed Assets (Net)RS

Net assets refer to the amount of total assets less total liabilities. Total assets include fixed…

Answered: REQUIREMENTS: A. Goodwill B.…

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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If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P10 par value
shares with a fair value of P20 per share, entered into a mortgage loan of P290,000 and paying direct
cost and stock issue cost of P50,000 and P20,000 respectively, a P25,000 direct cost and a P50,000
indirect cost however remain unpaid.

REQUIREMENTS:
A. Goodwill
B. Consolidated Total Liabilities at the date of acquisition

The following balances were taken from the trial balance of CARDO Company and SYANO Company at the
start of the fiscal year 20x7:
CARDO COMPANY
Book Value
Fair Value
Book Value
Fair Value
Cash
Accounts Receivable
Accounts Payable
P450,000
200,000
P500,000
250,000
155,000
600,000
P500,000
240,000 Mortgage Payable
200,000 Ordinary Shares
520,000 Retained Earnings
P440,000
220,000
LO
595,000
260,000
Inventory
Fixed Assets (Net)
SYANO COMPANY
Book Value
Fair Value
Book Value
Fair Value
Accounts Payable
P350,000
200,000
250,000
175,000
P340,000
220,000
Cash
P300,000
150,000
125,000
400,000
P300,000
160,000 Mortgage Payable
100,000 Ordinary Shares
420,000 Retained Earnings
Accounts Receivable
Inventory
Fixed Assets (Net)
RS

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