UTAH INC. issued 120,000 shares of P10 par common stock with a fair value of P2,550,000 for all the outstanding stock of JAZZ CORP. In addition UTAH incurred the following costs: Professional fees to arrange the business combination P27,000 Cost of SEC registration 12,000 Cost of printing and issuing stock certificates 3,000 Immediately before the business combination in which JAZZ was dissolved, JAZZ's assets and equities were as follows (in thousands): Book value Fair value Current assets P1,000 P1,100 Plant assets 1,500 2,200 Liabilities 300 300 Common stock 2,000 Retained earnings 200 What is the amount of goodwill (gain on acquisition)? O P 450,000 O P(450,000) O P 500,000 O P(550,000)

UTAH INC. issued 120,000 shares of P10 par common stock with a fair value of P2,550,000 for all the outstanding stock of JAZZ CORP. In addition UTAH incurred the following costs: Professional fees to arrange the business combination P27,000 Cost of SEC registration 12,000 Cost of printing and issuing stock certificates 3,000 Immediately before the business combination in which JAZZ was dissolved, JAZZ's assets and equities were as follows (in thousands): Book value Fair value Current assets P1,000 P1,100 Plant assets 1,500 2,200 Liabilities 300 300 Common stock 2,000 Retained earnings 200 What is the amount of goodwill (gain on acquisition)? O P 450,000 O P(450,000) O P 500,000 O P(550,000)

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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Question

UTAH INC. issued 120,000 shares of P10 par common stock with a fair value of P2,550,000 for all the
outstanding stock of JAZZ CORP. In addition UTAH incurred the following costs:
Professional fees to arrange the business combination
P27,000
Cost of SEC registration
12,000
Cost of printing and issuing stock certificates
3,000
Immediately before the business combination in which JAZZ was dissolved, JAZZ's assets and equities
were as follows (in thousands):
Book value
Fair value
Current assets
P1,000
P1,100
Plant assets
1,500
2,200
Liabilities
300
300
Common stock
2,000
Retained earnings
200
What is the amount of goodwill (gain on acquisition)?
O P 450,000
O P(450,000)
P 500,000
O P(550,000)

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