Subsidiary Company had common stock of P350,000 and retained earnings of P490,000. Parent Inc. had common stock of P700,000 and retained earnings of P980,000. On January 1, 2021, Parent issued 26,000 shares of common stock with a P12 par value and a P30 fair value for all of Subsidiary's outstanding common stock. Acquisition related cost such as legal fees and finder's fees amounted to P150,000. This combination was accounted for as an acquisition. Immediately after the combination, what was the consolidated net assets?
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- P Company acquired all the outstanding shares of S Company by issuing 50,000 shares with a par value of P100 on July 1, 2021. P's ordinary shares were selling at P102 per share at the date of acquisition. On the same date, the net asset of S had a carrying value and fair value of P3,800,000 and P4,500,000 respectively. Out of pocket expenses of the business combination were as follows (see image below). How much is the amount charged to expense? Legal fees for contract of business combination Audit fees for SEC registration of share issue Brokerage fee Accountant fee for pre-acquisition audit Printing and registration of stock certificates Other direct costs of acquisition 41,200 50,000 22,500 35,000 10,000 16,800 General administrative costs 25,000 12,100 Listing fees in issuing new sharesOn 1 May 2019, PR Corp purchased 75 per cent of the equity of SS Corp for $2.6 million. The consideration was 35,000 equity shares in PR Corp with a fair value of $2.6 million. The followings are extracts from the draft (not finalised) statements of profit or loss for PR Corp and its subsidiary SS Corp for the year ending 30 June 2019 together with the draft statements of financial position as at 30 June 2019. The profits of SS Corp have been earned evenly throughout the year 2019. Statements of profit or loss for the year ending 30 June 2019 PR Corp ($000) SS Corp ($000) Gross profit 1,456 960 Profit for the year 920 384 Statements of financial position as at 30 June 2019 PR Corp ($000) SS Corp ($000) Share capital 2,800 740 Retained earnings 11,600 1,324 Revaluation surplus 120 - 14,520 2,064 PR Corp has not yet accounted for the issue of its own…On January 1, 2020, Elite Company paid P 18,000,000 for 50,000 ordinary shares of Craze Company which represent a 25% interest in the in the net assets of Craze. The acquisition cost is equal to the carrying amount of the net assets acquired. Elite has the ability to exercise significant influence over Craze. Elite received a dividend of P35 per share from Craze in 2020. Craze reported net income of P9,600,000 for the year ended December 31, 2020. In the December 31, 2020 statement of financial position, what amount should be reported as investmentin Craze Company?a. 22,150,000b. 20,400,000c. 18,650,000d. 18,000,000
- On July 1, 2019, GAR Company acquired 800,000 shares of FAR Company at a price of P13 per share. GAR estimated that the price paid include P1.50 premium in order to gain control over FAR Company. On this date, the fair values of FAR Company’s identifiable assets and liabilities and their carrying values are given below: Book Value Fair ValueCurrent assets P2,000,000 P2,000,000Property, plant and equipment 9,000,000 11,000,000Liabilities P3,000,000 Ordinary shares, P5 par 5,000,000 Retained earnings 3,000,000 Determine the amount of goodwill assuming the non-controlling interest is measured at the proportionate share in the net assets:P Corporation purchased 60% of the shares of S Corporation on January 01, 2019 for P2,200,000. On that date, S Corp. reported retained earnings of P1,000,000 and had P2,000,000 of shares outstanding. P’s retained earnings was P4,000,000 at acquisition. P accounts for its investment in S under the cost method. The companies recorded the following results for 2019 & 2020: P Corporation S Corporation 2019: Net Income P700,000 P350,000 Dividends Paid 250,000 300,000 2020: Net Income 900,000 400,000 Dividends Paid 300,000 150,000 What amount of…P Corporation purchased 60% of the shares of S Corporation on January 01, 2019 for P2,200,000. On that date, S Corp. reported retained earnings of P1,000,000 and had P2,000,000 of shares outstanding. P’s retained earnings was P4,000,000 at acquisition. P accounts for its investment in S under the cost method. The companies recorded the following results for 2019 & 2020: P Corporation S Corporation 2019: Net Income P700,000 P350,000 Dividends Paid 250,000 300,000 2020: Net Income 900,000 400,000 Dividends Paid 300,000 150,000 What amount of…
- On January 1, 2021, PARKSOOYOUNG acquired all the outstanding shares ofSUNGJAE for P600,000. The shareholders’ equity of SUNGJAE on this dateamounted to P600,000. The net assets of SUNGJAE on this day were fairly valuedexcept for inventories which were overstated by P50,000, equipment which wasunderstated by P75,000, and building which was overstated by P125,000. Only half ofthe inventories were sold during 2021. The useful lives of the equipment and thebuilding at the beginning of 2021 were 3 years and 5 years remaining, respectively.On December 31, 2021, the statements of financial position of PARKSOOYOUNGand SUNGJAE are as follows:PARKSOOYOUNG SUNGJAECash 300,000 300,000Inventory 400,000 250,000Equipment 1,000,000 900,000Building 600,000 500,000Liabilities 1,100,000 500,000Share capital 600,000 600,000Retained earnings 600,000 850,000How much is the consolidated total assets as of December 31, 2021? A. 4,125,000B. 4,250,000C. 4,150,0004, D. 275,000Z Corporation has the following transactions relating to its investment during 2020: Jan 5 Acquired 16,000 shares of Y company for P1,500,000 paying an additional P10,000 for brokerage and P5,000 for commission. Feb 14 Received dividends from Y company declared January 10,2020 to the stockholders of records January 31,2020, P16,000. Required:prepare all the necessary entries assuming the investment is 1. Financial asset at Fair Value through profit and loss 2. Financial asset at Fair Value through other comprehensive incomeOn 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltdissued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of EldoradoLtd. The costs of issuing the shares by Quick Buck Ltd cost $1,600.At this date the statement of financial position of Eldorado Ltd was as follows: c Carrying amount Fair valueMachinery $40,000 $67,000Fixtures & fittings 60,000 68,000Vehicles 35,000 35,000 Current assets 10,000 12,000Current liabilities (16,000) (18,000)Total net assets…
- Peterpan Company issued 96,000 shares of its P25 par common stock for the net assets of Tinkerbell Corp. in business combination completed on March 1, 2020. The Acquiree’s net assets are worth P3,040,000 at fair market value. Out of pocket costs of the combination were as follows: Finder’s fee 20,800 Contingent consideration (probable and measurable) 14,400 Legal fee 21,600 Printing of stock certificates 6,800 Professional fees paid to a CPA 16,800 Fees paid to company lawyers 18,760 Fees paid to company accountants 31,120 The goodwill from the business combination is P334,400. How much is the fair market value of shares of Peterpan Company at March 1, 2020? Group of answer choices a. 25 b. 40 c. 35 d. 30Peterpan Company issued 96,000 shares of its P25 par common stock for the net assets of Tinkerbell Corp. in business combination completed on March 1, 2020. The Acquiree’s net assets are worth P3,040,000 at fair market value. Out of pocket costs of the combination were as follows: Finder’s fee 20,800 Contingent consideration (probable and measurable) 14,400 Legal fee 21,600 Printing of stock certificates 6,800 Professional fees paid to a CPA 16,800 Fees paid to company lawyers 18,760 Fees paid to company accountants 31,120 The goodwill from the business combination is P334,400. How much is the fair market value of shares of Peterpan Company at March 1, 2020? Group of answer choices 40 25 35 30Peterpan Company issued 96,000 shares of its P25 par common stock for the net assets of Tinkerbell Corp. in business combination completed on March 1, 2020. The Acquiree’s net assets are worth P3,040,000 at fair market value. Out of pocket costs of the combination were as follows: Finder’s fee 20,800 Contingent consideration (probable and measurable) 14,400 Legal fee 21,600 Printing of stock certificates 6,800 Professional fees paid to a CPA 16,800 Fees paid to company lawyers 18,760 Fees paid to company accountants 31,120 The goodwill from the business combination is P334,400. How much is the fair market value of shares of Peterpan Company at March 1, 2020? A. 35B. 40C. 30D. 25