GREY Corp's statement of financial position prior to the acquisition is shown as follows: ASSETS LIABILITIES AND EQUITY Cash 170,000 Liabilities 400,000 Accounts Receivable 50,000 Ordinary Share, P4 80,000 Inventories 100,000 Share Premium 320,000 Property, Plant and Equipment 880,000 Retained Earnings 400,000 TORRES Company will issue shares of P10 par value ordinary shares capital for all the assets and liabilities of GREY Company. As of acquisition date, TORRES Company's ordinary share capital has a current market value of P40 per share. The fair value of he current assets is P400,000 while that of the plant assets is P1,600,000. All the liabilities are correctly stated. TORRES Company issued sufficient share capital so that the fair value of the shares issued is equal to the fair market value of GREY Company's assets. To have goodwill of P200,000 the number of shares to be issued by TORRES Company should be

GREY Corp's statement of financial position prior to the acquisition is shown as follows: ASSETS LIABILITIES AND EQUITY Cash 170,000 Liabilities 400,000 Accounts Receivable 50,000 Ordinary Share, P4 80,000 Inventories 100,000 Share Premium 320,000 Property, Plant and Equipment 880,000 Retained Earnings 400,000 TORRES Company will issue shares of P10 par value ordinary shares capital for all the assets and liabilities of GREY Company. As of acquisition date, TORRES Company's ordinary share capital has a current market value of P40 per share. The fair value of he current assets is P400,000 while that of the plant assets is P1,600,000. All the liabilities are correctly stated. TORRES Company issued sufficient share capital so that the fair value of the shares issued is equal to the fair market value of GREY Company's assets. To have goodwill of P200,000 the number of shares to be issued by TORRES Company should be

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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