To recognize goodwill of P300,000, how many shares were to be issued? Red Corporation will issue common shares with a par value of P10 for the net assets of Blue Company. Red's Common stock has a current market value of P40 per share. Blue's statement of financial position on the date of acquisition follow: Common stock, P5 par Additional paid in capital Retained Earnings Blue's current assets are appraised at P400,000 and the property and equipment was also appraised at P1,600,000. Its liabilities are fairly value. Accordingly, Red Corporation issued shares of its common stock with a total market value equal to that of Blue's net assets including goodwill. Red also paid P60,000 acquisition costs, 80% were direct and the remainder are indirect costs. Current assets P320,000 P80,000 Property and Equipment 880,000 320,000 Liabilities 400,000 400,000
To recognize goodwill of P300,000, how many shares were to be issued? Red Corporation will issue common shares with a par value of P10 for the net assets of Blue Company. Red's Common stock has a current market value of P40 per share. Blue's statement of financial position on the date of acquisition follow: Common stock, P5 par Additional paid in capital Retained Earnings Blue's current assets are appraised at P400,000 and the property and equipment was also appraised at P1,600,000. Its liabilities are fairly value. Accordingly, Red Corporation issued shares of its common stock with a total market value equal to that of Blue's net assets including goodwill. Red also paid P60,000 acquisition costs, 80% were direct and the remainder are indirect costs. Current assets P320,000 P80,000 Property and Equipment 880,000 320,000 Liabilities 400,000 400,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![To recognize goodwill of P300,000, how many shares were to be issued?
Red Corporation will isue common shares with a par value of P10 for the net assets of Blue Company. Red's Common stock has
a current market value of P40 per share. Blue's statement of financial position on the date of acquisition follow:
Current assets
P320,000
Common stock, P5 par
P80,000
Additional paid in capital
Property and Equipment
Liabilities
880,000
320,000
400,000
Retained Earnings
400,000
Blue's current assets are appraised at P400,000 and the property and equipment was also appraised at P1,600,000. Its liabilities
are fairly value. Accordingly, Red Corporation issued shares of its common stock with a total market value equal to that of Blue's
net assets including goodwill. Red also paid P60,000 acquisition costs, 80% were direct and the remainder are indirect costs.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F788672f7-0150-4993-909d-6a570ec87675%2F84251ad7-d434-48e4-9074-7a9fdd5ab97b%2F8sluob_processed.jpeg&w=3840&q=75)
Transcribed Image Text:To recognize goodwill of P300,000, how many shares were to be issued?
Red Corporation will isue common shares with a par value of P10 for the net assets of Blue Company. Red's Common stock has
a current market value of P40 per share. Blue's statement of financial position on the date of acquisition follow:
Current assets
P320,000
Common stock, P5 par
P80,000
Additional paid in capital
Property and Equipment
Liabilities
880,000
320,000
400,000
Retained Earnings
400,000
Blue's current assets are appraised at P400,000 and the property and equipment was also appraised at P1,600,000. Its liabilities
are fairly value. Accordingly, Red Corporation issued shares of its common stock with a total market value equal to that of Blue's
net assets including goodwill. Red also paid P60,000 acquisition costs, 80% were direct and the remainder are indirect costs.
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