Subsidiary Company was merged with Parent Corporation on December 31, 2021. In the business combination, Parent Corporation issued 40,000 shares of its P100 par value ordinary shares, with market price of P127 per share. Fair market value agrees with book values, except for Land which has a market value higher by P250,000. Additional cash payments were made by Parent Corporation in completing the combination, P25,000 for stock issue costs and P20,000 for direct costs. The stockholders' equity section of each company's balance sheet before the combination was: Parent Corporation Subsidiary Company Ordinary Shares 8,450,000 5,360,000 Additional Paid-In Capital 3,700,000 1,850,000 Retained Earnings 4,080,000 (1,670,000) Total 16,230,000 5,540,000 The retained earnings immediately after the combination is:

Subsidiary Company was merged with Parent Corporation on December 31, 2021. In the business combination, Parent Corporation issued 40,000 shares of its P100 par value ordinary shares, with market price of P127 per share. Fair market value agrees with book values, except for Land which has a market value higher by P250,000. Additional cash payments were made by Parent Corporation in completing the combination, P25,000 for stock issue costs and P20,000 for direct costs. The stockholders' equity section of each company's balance sheet before the combination was: Parent Corporation Subsidiary Company Ordinary Shares 8,450,000 5,360,000 Additional Paid-In Capital 3,700,000 1,850,000 Retained Earnings 4,080,000 (1,670,000) Total 16,230,000 5,540,000 The retained earnings immediately after the combination is:

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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