Shortly after the above information was complied, a fire destroyed the accounting records. You have been employed to determine the fair value of the shares issued by BENI Co. to acquire PATTY.
Shortly after the above information was complied, a fire destroyed the accounting records. You have been employed to determine the fair value of the shares issued by BENI Co. to acquire PATTY.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![On January 1, 2021, BENI Co. issued shares of its P5 par value share capital to acquire all the net assets of PATTY
Company, which was liquidated immediately thereafter. Cost of issuing equity instruments amounting to P5,000
were incurred and paid by BENI Co., aside from the indirect acquisition costs amounting P3,000. The Statement of
Financial Position for BENI Co. and the Statement of Financial for the combined company under the purchase
method are presented below.
BENI CO.
Combined
BENI CO. Combined
Cash
100,000 Accounts Payable
180,000 Bonds Payable
220,000 Ordinary Share Capital
70,000
40,000
60,000
Accounts Receivable
130,000
100,000
160,000
Inventory
100,000
200,000
240,000
Land
100,000
175,000 Share Premium
60,000
420,000
550,000 Retained Earnings
Buildings and Equipment
Accumulated Depreciation
400,000
250,000
247,000
150,000
150,000
Goodwill
52,000
Shortly after the above information was complied, a fire destroyed the accounting records. You have been
employed to determine the fair value of the shares issued by BENI Co. to acquire PATTY.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fca77781e-2144-4e1d-852f-d59304a0092f%2F0dc7c2d9-2b85-42e7-9c04-fb477ba96a52%2Fdz3rbc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 1, 2021, BENI Co. issued shares of its P5 par value share capital to acquire all the net assets of PATTY
Company, which was liquidated immediately thereafter. Cost of issuing equity instruments amounting to P5,000
were incurred and paid by BENI Co., aside from the indirect acquisition costs amounting P3,000. The Statement of
Financial Position for BENI Co. and the Statement of Financial for the combined company under the purchase
method are presented below.
BENI CO.
Combined
BENI CO. Combined
Cash
100,000 Accounts Payable
180,000 Bonds Payable
220,000 Ordinary Share Capital
70,000
40,000
60,000
Accounts Receivable
130,000
100,000
160,000
Inventory
100,000
200,000
240,000
Land
100,000
175,000 Share Premium
60,000
420,000
550,000 Retained Earnings
Buildings and Equipment
Accumulated Depreciation
400,000
250,000
247,000
150,000
150,000
Goodwill
52,000
Shortly after the above information was complied, a fire destroyed the accounting records. You have been
employed to determine the fair value of the shares issued by BENI Co. to acquire PATTY.
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