If Alakdan Co., a new company would acquire the net assets of Cardo and Allana Company by issuing 50,000 shares of P25 par value ordinary shares with fair value of P130 per share and paying professional finders fee and stock registration costs of P125,000 and P65,000, respectively, determine:i. The total amount of Goodwill to be reported by Alakdan Co.ii. The total assets of Alakdan Co. after the business combination.iii. The total stockholders equity of Aklan Co after the business combination.iv. The journal entries to be made by Alakdan Co. for the business combination. The following balances were taken from the trial balance of CARDO Companyand ALLANA Company at the start of the fiscal year 2018:CARDO CoALLANA CoBook ValueFair ValueBook ValueFair ValueР3,000,000200,000150,0005,000,000650,0004,000,0003,000,0001,800,000-200,000P3,000,000215,000140,0005,300,000700,0004,200,000P750,000100,00050,0002,000,000100,0001,500,000750,000500,000250,000P750,00090,00040,0002,100,00080,000 -1,450,000CashAccounts rec.InventoryPPE (10years)GoodwillAccounts pay.Ordinary sharesAPICAccumulated earnings25

Goodwill is referred to as amount which exceeds the fair value of assets and liabilities assumed by…

Answered: rted by Alakdan Co. ii. The total…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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If Alakdan Co., a new company would acquire the net assets of Cardo and Allana Company by
issuing 50,000 shares of P25 par value ordinary shares with fair value of P130 per share and
paying professional finders fee and stock registration costs of P125,000 and P65,000, respectively,
determine:
i. The total amount of Goodwill to be reported by Alakdan Co.
ii. The total assets of Alakdan Co. after the business combination.
iii. The total stockholders equity of Aklan Co after the business combination.
iv. The journal entries to be made by Alakdan Co. for the business combination.

The following balances were taken from the trial balance of CARDO Company
and ALLANA Company at the start of the fiscal year 2018:
CARDO Co
ALLANA Co
Book Value
Fair Value
Book Value
Fair Value
Р3,000,000
200,000
150,000
5,000,000
650,000
4,000,000
3,000,000
1,800,000-
200,000
P3,000,000
215,000
140,000
5,300,000
700,000
4,200,000
P750,000
100,000
50,000
2,000,000
100,000
1,500,000
750,000
500,000
250,000
P750,000
90,000
40,000
2,100,000
80,000 -
1,450,000
Cash
Accounts rec.
Inventory
PPE (10years)
Goodwill
Accounts pay.
Ordinary shares
APIC
Accumulated earnings
25

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