On January 2, 2021 PAMIGAY CORP paid P380,000 cash and issued 120,000 new shares of its P5 par value common stock valued at P20 a share for all of SAYO CORP’s outstanding common shares in an acquisition. PAMIGAY CORP paid P15,000 for registering and issuing securities and P10,000 for other direct costs of the business combination. The fair value and book value of SAYO CORP’s identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2021 is as follows: How much is the cash to be presented on the consolidated statement of financial position as of the date of acquisition? a. 1,150,000 b. 865,000 c. 1,245,000 d. 1,270,000
On January 2, 2021 PAMIGAY CORP paid P380,000 cash and issued 120,000 new shares of its P5 par value common stock valued at P20 a share for all of SAYO CORP’s outstanding common shares in an acquisition. PAMIGAY CORP paid P15,000 for registering and issuing securities and P10,000 for other direct costs of the business combination. The fair value and book value of SAYO CORP’s identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2021 is as follows: How much is the cash to be presented on the consolidated statement of financial position as of the date of acquisition? a. 1,150,000 b. 865,000 c. 1,245,000 d. 1,270,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On January 2, 2021 PAMIGAY CORP paid P380,000 cash and issued 120,000 new shares of its P5 par value common stock valued at P20 a share for all of SAYO CORP’s outstanding common shares in an acquisition. PAMIGAY CORP paid P15,000 for registering and issuing securities and P10,000 for other direct costs of the business combination. The fair value and book value of SAYO CORP’s identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2021 is as follows:
How much is the cash to be presented on the consolidated statement of financial position as of the date of acquisition?
a. 1,150,000
b. 865,000
c. 1,245,000
d. 1,270,000
Transcribed Image Text:PAMIGAY
SAYO CORP
CORP
Cash
P 1,150,000
P 120,000
Inventories
320,000
400,000
Other current assets
500,000
500,000
Land
350,000
250,000
PPE, net
2,500,000
1,400,000
Goodwill
500,000
100,000
Total Assets
5,320,000
2,770,000
Accounts payable
P1,000,000
P 300,000
Notes payable
1,300,000
660,000
Capital stock, P5 par
2,000,000
500,000
Additional Paid-in capital
1,000,000
100,000
Retained Earnings
20,000
1,210,000
Total Liabilities & Equities
P
5,320,000 P
2,770,000
How much is the cash to be presented on the consolidated statement of financial
position as of the date of acquisition?
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