Rivendell Corporation and Foster Company merged as of January 1, 2019. To effect the merger, Rivendell paid finder's fees of $40,000, legal fees of $13,000, audit fees related to the stock issuance of $10,000, stock registration fees of $5,000, and stock listing application fees of $4,000. Based on the preceding information, under the acquisition method, what amount relating to the business combination would be expensed Select one: a. 53,000 b. 72,000 c. 19,000 d. 63,000
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- On April 1, 2019, Itaewon Corp. paid cash of P1,240,000 for all the net assets of Sunshine Company appropriately accounted for as a merger. The recorded assets and liabilities of Sunshine Company on April 5, 2019 follow: 300,000 420,000 100,000 0 Del Luna Corporation concluded that the fair value of Scarlet Company was P160,000 and paid that amount to acquire all of its net assets. Scarlet reported assets with a book value of P120,000 and a fair value of 196,000 and liabilities with a book value and fair value of P46,000 on the date of combination. Del Luna also paid P6,000 to a search firm for finder’s fees related to acquisition. What amount will be recorded as goodwill by Del Luna Corporation? 26,000 16,000 0 10,000 On January 1 2021,NOP acquires 100% interest in QRS in exchange for NOP’s 10,000 shares with par value per share of P20 and fair value per share of P200. QRS’s net identifiable assets have fair value of P1,920,000 and a book value of P1,850,000. In addition, NOP…Pat Company acquired Sub Company on February 6, 2022. The following out of pocket costs of the combination are as follows:Legal fees for business combination contract- P174,700Audit fees for SEC registration of share issue- 198,400Printing cost of stock certificates- 144,900Broker's fee- 135,000Accountant's fee for pre-acquisition audit- 161,000Other direct cost of acquisition- 90,400General and allocated expenses- 115,300Stock exchange listing fees in issuing shares- 172,000What is the amount of expense to be recognized in the Statement of Comprehensive Income for the year 2022? 676,400 848,400 1,046,800 874,800Parent Company acquired Sub Company on February 6, 2022. The following out of pocket costs of the combination are as follows:Legal fees for business combination contract- P174,700Audit fees for SEC registration of share issue- 198,400Printing cost of stock certificates- 144,900Broker's fee- 135,000Accountant's fee for pre-acquisition audit- 161,000Other direct cost of acquisition- 90,400General and allocated expenses- 115,300Stock exchange listing fees in issuing shares- 172,000What is the amount of expense to be recognized in the Statement of Comprehensive Income for the year 2022? A. 1,046,800 B. 676,400 C. 874,800 D. 848,400
- Use the following to answer questions 8 through 10: On May 1, 2021, Jazzie Co. agreed to sell the assets of its Mister Division to Shawna Inc. for $80 million. The sale was completed on December 31, 2021. Jazzie’s year ends on December 31st. The following additional facts pertain to the transaction: The Mister Division qualifies as a component of an entity as defined by GAAP. Mister's net assets totaled $48 million on Jazzie's books at the time of the sale. Mister incurred a pre-tax operating loss of $10 million in 2021. Jazzie’s income tax rate is 40%. In the 2021 income statement for Jazzie Co., they would report after tax income from discontinued operations of: Group of answer choices $9.2 million. $13.2 million. $22 million. $26 million.The following book and fair values were available for NorthStar Company as of March 1. BluePrint Company pays $4,200,000 cash for all of NorthStar’s common stock in a merger, after which NorthStar will cease to exist as a separate entity. BluePrint pays $70,000 for legal fees to complete the transaction. Required: Pass the necessary journal entries in the books of BluePrint for its acquisition of NorthStar’s common stocks.On January 1, 2021, KORU Co. issued shares of its $5 par value share capital to acquire all the net assets of PATRICH Company, which was liquidated immediately thereafter. Cost of issuing equity instruments amounting to $5,000 were incurred and paid by KORU Co., aside from the indirect acquisition costs amounting $3,000. The Statement of Financial Position for KORU Co. and the Statement of Financial for the combined company under the purchase method are presented below. KORU Co. Combined KORU Co. Combined Cash 70,000 100,000 Accounts Payable 40,000 60,000 Accounts Receivable 130,000 180,000 Bonds Payable 100,000 160,000 Inventory 100,000 220,000 Ordinary Share Capital 200,000 240,000 Land 100,000 175,000 Share Premium 60,000 420,000 Buildings and Equipment 400,000 550,000 Retained Earnings 250,000 247,000 Accumulated Depreciation 150,000 150,000 Goodwill - 52,000 Shortly after the above information was compiled, a fire destroyed the accounting…
- On Jan 1, 2019, Rudd Company acquired 100% of the common stock of Wilton Company. At that time, Rudd held land with a book value of $100,000 and a fair value of $260,000; Wilton held land with a book value of $50,000 and fair value of $600,000. at what amount would land be reported in Rudd Company balance sheet prepared immediately after the merger ? Select one: a. 860,000 b. 550,000 c. 700,000 d. 590,000Allison Corporation acquired all of the outstanding voting stock of Mathias, Incorporated, on January 1, 2023, in exchange for $6,059,500 in cash. Allison intends to maintain Mathias as a wholly owned subsidiary. Both companies have December 31 fiscal year-ends. At the acquisition date, Mathias’s stockholders’ equity was $2,045,000 including retained earnings of $1,545,000. At the acquisition date, Allison prepared the following fair-value allocation schedule for its newly acquired subsidiary: Consideration transferred $ 6,059,500 Mathias stockholders' equity 2,045,000 Excess fair over book value $ 4,014,500 to unpatented technology (8-year remaining life) $ 872,000 to patents (10-year remaining life) 2,590,000 to increase long-term debt (undervalued, 5-year remaining life) (145,000) 3,317,000 Goodwill $ 697,500 Postacquisition, Allison employs the equity method to account for its investment in Mathias. During the two years following the business…On September 18, 2020, OPQ Co. acquired all of TUV Inc.’s P400,000 identifiable assets and P100,000 liabilities. Book values of TUV’s assets and liabilities equal their fair values except for an overvalued Building. As a consideration, OPQ Co. issued its own shares of stock with a market value of P320,000. The merger resulted into P140,000 goodwill. Assuming OPQ Co. had P1,000,000 total assets prior to the combination, compute the total assets immediately after the merger.
- DEF company acquired the assets and assumed liabilities of GHI Company on January 1, 2022 by paying P3,000,000 and issuing its own ordinary shares. The comparison of the acquirer’s balance sheet before and after business combination transaction is as follows: Balance sheet before Acquisition Balance Sheet after Acquisition Total Assets 13,545,000 17,595,000 Total Liabilities 3,760,000 ? Total SHE 9,785,000 ? The fair value of the identifiable net asset of the acquiree is P4,835,000 and the book value of acquiree’s liabilities amounting to P1,300,000 is lower compared to its fair value by P350,000. DEF company paid acquisition related costs amounting to P50,000. What is the fair market value of the ordinary shares issued by the acquirer? a. 2,500,000 b. 2,400,000 c. 2,480,000 d. 2,450,000Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January 1, 2020, in exchange for $6,162,000 in cash. Allison intends to maintain Mathias as a wholly owned subsidiary. Both companies have December 31 fiscal year-ends. At the acquisition date, Mathias’s stockholders’ equity was $2,070,000 including retained earnings of $1,570,000. At the acquisition date, Allison prepared the following fair-value allocation schedule for its newly acquired subsidiary: Consideration transferred $ 6,162,000 Mathias stockholders' equity 2,070,000 Excess fair over book value $ 4,092,000 to unpatented technology (8-year remaining life) $ 912,000 to patents (10-year remaining life) 2,640,000 to increase long-term debt (undervalued, 5-year remaining life) (170,000 ) 3,382,000 Goodwill $ 710,000 Postacquisition, Allison employs the equity method to account for its investment in…For each of the following independent intra-group transaction scenarios, assume that the consolidation process is done on 31 December 2020. Required: (a) Prepare the necessary consolidation journal entries in each scenario. Preston Ltd owns 80% share capital of Sutherland Ltd. The tax rate is 30%. (narrations are not required). Scenario 3: On 1 July 2018, Preston Ltd sold an item of machinery to Sutherland Ltd for $900,000. Preston Ltd originally purchased the machinery for $1,600,000 on 1 January 2016. The original estimated useful life was 5 years but at the time of the sale the remaining useful life was estimated to be 4 years by Sutherland Ltd. The expected residual value of the machinery is estimated to be $nil by Sutherland Ltd. ANSWER HERE: Date Account Name Debit Credit