.29 Subsidiary Company was merged with Parent Corporation on December 31, 2021. In the businesscombination, Parent Corporation issued 40,000 shares of its P100 par value ordinary shares, withmarket price of P127 per share. Fair market value agrees with book values, except for Land which has amarket value higher by P250,000. Additional cash payments were made by Parent Corporation incompleting the combination, P25,000 for stock issue costs and P20,000 for direct costs. Thestockholders' equity section of each company's balance sheet before the combination was:Parent Corporation Subsidiary CompanyOrdinary Shares8,450,0005,360,000Additional Paid-In Capital3,700,0001,850,000Retained Earnings4,080,000(1,670,000)Total16,230,0005,540,000The retained earnings immediately after the combination is:

Retained Earnings immediately after the combination includes: a)Parent Company Pre combination…

Answered: The retained earnings immediately after…

Business

Accounting

The retained earnings immediately after the combination is!

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 1MC

See similar textbooks

Similar questions

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 shares
Subsidiary Company was merged with Parent Corporation on December 31, 2021. In the business combination, Parent Corporation issued 40,000 shares of its P100 par value ordinary shares, with market price of P127 per share. Fair market value agrees with book values, except for Land which has a market value higher by P250,000. Additional cash payments were made by Parent Corporation in completing the combination, P25,000 for stock issue costs and P20,000 for direct costs. The stockholders' equity section of each company's balance sheet before the combination was: Parent Corporation Subsidiary Company Ordinary Shares 8,450,000 5,360,000 Additional Paid-In Capital 3,700,000 1,850,000 Retained Earnings 4,080,000 (1,670,000) Total 16,230,000 5,540,000 The retained earnings immediately after the combination is:
CARBS Company merged into CREATIN Company on July 1, 2021. In exchange for the net assets at fair market value of CARBS Company amounting to P696,450, CREATIN, issued 68,000 ordinary shares at P9 par value with a market price of P12 per share. Out-of-pockets of the combination were as follows: Legal fees for the contract of business combination P35,600; Audit fee for SEC registration of stock issue P90,000; Printing costs of stock certificates P14,500; Broker’s fee P23,600; Accountant’s fee for pre-acquisition P80,000; Other indirect cost of acquisition P75,000; General and allocated expenses P43,000 and Listing fees in issuing new shares P36,000. CARBS will pay an additional cash consideration of P455,000 in the event that CREATIN’s net income will be equal or greater than P950,000 for the period ended December 31, 2021. At acquisition date, there is a high probability of reaching the target net income and the fair value of the additional consideration was determined to be P195,000.…
On January 1, 2021, KIND Company acquired 5,000 shares of FVOCI securities of OVERFLOW Company at P110,000 plus brokerage expense of P16,000. On February 14, 2021, OVERFLOW Company's ordinary share was split on a 3-for-5 basis. The fair value on December 21, 2021, amounted to P55 per share. a. Compute for the total number of shares at the end of the year. b. Cost per share at Feb 14 c. Compute for the unrealized gain or (loss) to be presented in the other comprehensive income for the current year.
XYZ Company merged into UUU Company on July 1, 2021. In exchange for the net assets at fair market value of XYZ Company amounting to P696,450, UUU, issued 68,000 ordinary shares at P9 par value with a market price of P12 per share. Out-of-pockets of the combination were as follows: Legal fees for the contract of business combination P35,600 Audit fee for SEC registration of stock issue P90,000 Printing costs of stock certificates P14,500 Broker's fee P23,600 Accountant's fee for pre-acquisition P80,000 Other indirect cost of acquisition P75,000 General and allocated expenses P43,000 Listing fees in issuing new shares P36,000 XYZ will pay an additional cash consideration of P455,000 in the event that UUU's net income will be equal or greater than P950,000 for the period ended December 31, 2021. At acquisition date, there is a high probability of reaching the target net income and the fair value of the additional consideration was determined to be P195,000. Actual net income for the…
XYZ Company merged into UUU Company on July 1, 2021. In exchange for the net assets at fair market value of XYZ Company amounting to P696,450, UUU, issued 68,000 ordinary shares at P9 par value with a market price of P12 per share. Out-of-pockets of the combination were as follows: Legal fees for the contract of business combination P35,600; Audit fee for SEC registration of stock issue P90,000; Printing costs of stock certificates P14,500; Broker’s fee P23,600; Accountant’s fee for pre-acquisition P80,000; Other indirect cost of acquisition P75,000; General and allocated expenses P43,000 and Listing fees in issuing new shares P36,000. XYZ will pay an additional cash consideration of P455,000 in the event that UUU’s net income will be equal or greater than P950,000 for the period ended December 31, 2021. At acquisition date, there is a high probability of reaching the target net income and the fair value of the additional consideration was determined to be P195,000. Actual net income…
XYZ Company merged into UUU Company on July 1, 2021. In exchange for the net assets at fair market value of XYZ Company amounting to P696,450, UUU, issued 68,000 ordinary shares at P9 par value with a market price of P12 per share. Out-of-pockets of the combination were as follows: Legal fees for the contract of business combination P35,600; Audit fee for SEC registration of stock issue P90,000; Printing costs of stock certificates P14,500; Broker’s fee P23,600; Accountant’s fee for pre-acquisition P80,000; Other indirect cost of acquisition P75,000; General and allocated expenses P43,000 and Listing fees in issuing new shares P36,000. XYZ will pay an additional cash consideration of P455,000 in the event that UUU’s net income will be equal or greater than P950,000 for the period ended December 31, 2021. At acquisition date, there is a high probability of reaching the target net income and the fair value of the additional consideration was determined to be P195,000. Actual net income…
On January 1, 20x4, the Alpha Company entered into a transaction for acquisition of assets and liabilities of Beta Company. Alpha issued P400 in long-term liabilities and 40 shares of ordinary shares having a par value of P1 per share but a fair value of P10 per share. Alpha paid P20 to lawyers, accountants and brokers for assistance in bringing about this purchase. Another P15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Item.. ..Alpha .Beta Cash.. P 180 ..P 40 Accounts Receivable...... 810..180 Inventory... 1,080.. 280 Land. . 600.. 360 Buildings (net).. .1,260.. 440 Equipment (net).. 480... 100 .....- Accounts Payable........( 450)..( 80) Long-term liabilities......(1,290)..( 400) Ordinary Shares, P1 par....( 330) Ordinary Shares, P20 par .( 240) Share Premium.. ( 1,080)..( 340) Retained Earnings.......(1,260).. ( 340) Note: Parentheses indicate a credit balance.
XENON Company merged into URANIUM Company on July 1, 2021. In exchange for the net assets at fair market value of XENON Company amounting to P696,450, URANIUM, issued 68,000 ordinary shares at P9 par value with a market price of P12 per share. Out-of-pockets of the combination were as follows: Legal fees for the contract of business combination P35,600; Audit fee for SEC registration of stock issue P90,000; Printing costs of stock certificates P14,500; Broker’s fee P23,600; Accountant’s fee for pre-acquisition P80,000; Other indirect cost of acquisition P75,000; General and allocated expenses P43,000; Listing fees in issuing new shares P36,000. XENON will pay an additional cash consideration of P455,000 in the event that URANIUM’s net income will be equal or greater than P950,000 for the period ended December 31, 2021. At acquisition date, there is a high probability of reaching the target net income and the fair value of the additional consideration was determined to be P195,000.…
On December 31, 2020, Naengmyeon Company, an entity with no subsidiary, purchased 10,000 ordinary shares from Bibim Corp. at P150 per share. At the time of purchase, Bibim has an outstanding 50,000 shares with a total shareholders’ equity of P7,500,000. For the year 2021, Bibim reported a profit of P3,000,000. On December 30, 2021, Naengmyeon received a cash dividend of P50 per share. What is the carrying value of the investment at December 31, 2021? a. P1,600,000 b. P2,100,000 c. P1,500,000 d. P2,600,000
P Company acquired the net assets of S Company by issuing 150,000 shares of its P10 par value ordinary share capital on July 1, 2021. The market value of the shares was P12. P also paid direct costs of P100,000 which includes P15,000 cost of issuing and registering new shares. The financial statements of P and S were (see image below). The fair value and book value of S Company's identifiable assets and liabilities were the same except Equipment which was undervalued by P250.000 and lInventory which was overvalued by P100,000. Assuming that P Company is an SME. How much is the goodwill/gain on bargain purchase? " P S Cash Inventory Equipment Other Assets 150,000 320,000 4,350,000 500,000 5,320,000 120,000 400,000 1,750,000 500,000 2,770,000 Total Accounts Payable Notes Payable Share Capital, P10 par 1,000,000 1,300,000 2,000,000 1,000,000 20,000 5,320,000 300,000 660,000 500,000 100,000 1,210,000 2,770,000 Share Premium Retained Earnings Total
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. 30