The retained earnings immediately after the combination is!
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- 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:P Company acquired all the outstanding shares of S Company by issuing 50,000 shares with a par value of P100 on July 1, 2021. P's ordinary shares were selling at P102 per share at the date of acquisition. On the same date, the net asset of S had a carrying value and fair value of P3,800,000 and P4,500,000 respectively. Out of pocket expenses of the business combination were as follows (see image below). How much is the amount charged to expense? Legal fees for contract of business combination Audit fees for SEC registration of share issue Brokerage fee Accountant fee for pre-acquisition audit Printing and registration of stock certificates Other direct costs of acquisition 41,200 50,000 22,500 35,000 10,000 16,800 General administrative costs 25,000 12,100 Listing fees in issuing new sharesCARBS Company merged into CREATIN Company on July 1, 2021. In exchange for the net assets at fair market value of CARBS Company amounting to P696,450, CREATIN, issued 68,000 ordinary shares at P9 par value with a market price of P12 per share. Out-of-pockets of the combination were as follows: Legal fees for the contract of business combination P35,600; Audit fee for SEC registration of stock issue P90,000; Printing costs of stock certificates P14,500; Broker’s fee P23,600; Accountant’s fee for pre-acquisition P80,000; Other indirect cost of acquisition P75,000; General and allocated expenses P43,000 and Listing fees in issuing new shares P36,000. CARBS will pay an additional cash consideration of P455,000 in the event that CREATIN’s net income will be equal or greater than P950,000 for the period ended December 31, 2021. At acquisition date, there is a high probability of reaching the target net income and the fair value of the additional consideration was determined to be P195,000.…
- On January 1, 2021, KIND Company acquired 5,000 shares of FVOCI securities of OVERFLOW Company at P110,000 plus brokerage expense of P16,000. On February 14, 2021, OVERFLOW Company's ordinary share was split on a 3-for-5 basis. The fair value on December 21, 2021, amounted to P55 per share. a. Compute for the total number of shares at the end of the year. b. Cost per share at Feb 14 c. Compute for the unrealized gain or (loss) to be presented in the other comprehensive income for the current year.XYZ Company merged into UUU Company on July 1, 2021. In exchange for the net assets at fair market value of XYZ Company amounting to P696,450, UUU, issued 68,000 ordinary shares at P9 par value with a market price of P12 per share. Out-of-pockets of the combination were as follows: Legal fees for the contract of business combination P35,600 Audit fee for SEC registration of stock issue P90,000 Printing costs of stock certificates P14,500 Broker's fee P23,600 Accountant's fee for pre-acquisition P80,000 Other indirect cost of acquisition P75,000 General and allocated expenses P43,000 Listing fees in issuing new shares P36,000 XYZ will pay an additional cash consideration of P455,000 in the event that UUU's net income will be equal or greater than P950,000 for the period ended December 31, 2021. At acquisition date, there is a high probability of reaching the target net income and the fair value of the additional consideration was determined to be P195,000. Actual net income for the…XYZ Company merged into UUU Company on July 1, 2021. In exchange for the net assets at fair market value of XYZ Company amounting to P696,450, UUU, issued 68,000 ordinary shares at P9 par value with a market price of P12 per share. Out-of-pockets of the combination were as follows: Legal fees for the contract of business combination P35,600; Audit fee for SEC registration of stock issue P90,000; Printing costs of stock certificates P14,500; Broker’s fee P23,600; Accountant’s fee for pre-acquisition P80,000; Other indirect cost of acquisition P75,000; General and allocated expenses P43,000 and Listing fees in issuing new shares P36,000. XYZ will pay an additional cash consideration of P455,000 in the event that UUU’s net income will be equal or greater than P950,000 for the period ended December 31, 2021. At acquisition date, there is a high probability of reaching the target net income and the fair value of the additional consideration was determined to be P195,000. Actual net income…
- On December 31, 2020, Naengmyeon Company, an entity with no subsidiary, purchased 10,000 ordinary shares from Bibim Corp. at P150 per share. At the time of purchase, Bibim has an outstanding 50,000 shares with a total shareholders’ equity of P7,500,000. For the year 2021, Bibim reported a profit of P3,000,000. On December 30, 2021, Naengmyeon received a cash dividend of P50 per share. What is the carrying value of the investment at December 31, 2021? a. P1,600,000 b. P2,100,000 c. P1,500,000 d. P2,600,000On January 1, 20x4, the Alpha Company entered into a transaction for acquisition of assets and liabilities of Beta Company. Alpha issued P400 in long-term liabilities and 40 shares of ordinary shares having a par value of P1 per share but a fair value of P10 per share. Alpha paid P20 to lawyers, accountants and brokers for assistance in bringing about this purchase. Another P15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Item.. ..Alpha .Beta Cash.. P 180 ..P 40 Accounts Receivable...... 810..180 Inventory... 1,080.. 280 Land. . 600.. 360 Buildings (net).. .1,260.. 440 Equipment (net).. 480... 100 .....- Accounts Payable........( 450)..( 80) Long-term liabilities......(1,290)..( 400) Ordinary Shares, P1 par....( 330) Ordinary Shares, P20 par .( 240) Share Premium.. ( 1,080)..( 340) Retained Earnings.......(1,260).. ( 340) Note: Parentheses indicate a credit balance.XENON Company merged into URANIUM Company on July 1, 2021. In exchange for the net assets at fair market value of XENON Company amounting to P696,450, URANIUM, issued 68,000 ordinary shares at P9 par value with a market price of P12 per share. Out-of-pockets of the combination were as follows: Legal fees for the contract of business combination P35,600; Audit fee for SEC registration of stock issue P90,000; Printing costs of stock certificates P14,500; Broker’s fee P23,600; Accountant’s fee for pre-acquisition P80,000; Other indirect cost of acquisition P75,000; General and allocated expenses P43,000; Listing fees in issuing new shares P36,000. XENON will pay an additional cash consideration of P455,000 in the event that URANIUM’s net income will be equal or greater than P950,000 for the period ended December 31, 2021. At acquisition date, there is a high probability of reaching the target net income and the fair value of the additional consideration was determined to be P195,000.…
- P Company acquired the net assets of S Company by issuing 150,000 shares of its P10 par value ordinary share capital on July 1, 2021. The market value of the shares was P12. P also paid direct costs of P100,000 which includes P15,000 cost of issuing and registering new shares. The financial statements of P and S were (see image below). The fair value and book value of S Company's identifiable assets and liabilities were the same except Equipment which was undervalued by P250.000 and lInventory which was overvalued by P100,000. Assuming that P Company is an SME. How much is the goodwill/gain on bargain purchase? " P S Cash Inventory Equipment Other Assets 150,000 320,000 4,350,000 500,000 5,320,000 120,000 400,000 1,750,000 500,000 2,770,000 Total Accounts Payable Notes Payable Share Capital, P10 par 1,000,000 1,300,000 2,000,000 1,000,000 20,000 5,320,000 300,000 660,000 500,000 100,000 1,210,000 2,770,000 Share Premium Retained Earnings TotalOn January 1, 20x1, Pinup Corp. acquired 34,560 outstanding ordinary shares of Slug Corp. for a cash consideration of P5,158,400. The shareholders’ equity of Slug Corp. on the date of business combination is presented below: Ordinary shares P100 par value 5,760,000 Share premium 1,600,000 Retained Earnings 960,000 Pinup Corp agreed to issue additional 1,000 shares to former owners of Slug Corp if the market price per share of Pinup Corp shares increase to P120 per share. On the acquisition date, the contingent consideration was estimated at P80,000. What is the amount of non-controlling interest if it is measured at its proportionate share in the identifiable net assets of Slug Corp.?On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…