.29 Subsidiary Company was merged with Parent Corporation on December 31, 2021. In the businesscombination, Parent Corporation issued 40,000 shares of its P100 par value ordinary shares, withmarket price of P127 per share. Fair market value agrees with book values, except for Land which has amarket value higher by P250,000. Additional cash payments were made by Parent Corporation incompleting the combination, P25,000 for stock issue costs and P20,000 for direct costs. Thestockholders' equity section of each company's balance sheet before the combination was:Parent Corporation Subsidiary CompanyOrdinary Shares8,450,0005,360,000Additional Paid-In Capital3,700,0001,850,000Retained Earnings4,080,000(1,670,000)Total16,230,0005,540,000The retained earnings immediately after the combination is:

Retained Earnings immediately after the combination includes: a)Parent Company Pre combination…

Answered: The retained earnings immediately after…

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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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Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

Question

.29

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:

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