Concept explainers
a.
Business combination:
Business combination refers to the combining of one or more business organizations in a single entity. The business combination leads to the formation of combined financial statements. After business combination, the entities having separate control merges into one having a control over all the assets and liabilities. Merging and acquisition are types of business combinations.
Book value:
Book value of the asset is found out after deducting
Basic earnings per share (BEPS):
The part of profit which is allocated to each outstanding share of the company is called the basic earnings per share. It is computed by dividing the net income after the tax with the number of outstanding shares of the company.
The consolidated basic EPS if Company P acquires 100% of the Company S shares.
Basic earnings per share (BEPS):
The part of profit which is allocated to each outstanding share of the company is called basic earnings per share.
To calculate:
The consolidated basic EPS if Company P owns 80% of the Company S shares.
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Chapter 6 Solutions
ADVANCED ACCOUNTING
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- Sales price variance for the yeararrow_forwardDuring the current yeararrow_forwardTyson & Co. values its goodwill at three years' purchase of the last four years' average profit. The recorded profits for the last four years were R.O 50,000, R.O 28,000, R.O 18,000, and R.O 14,000, respectively. Find out the value of goodwill.need answerarrow_forward
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