Gumiho Corporation acquired Forest Company through an exchange of common shares. All of Forest's assetsand liabilities were immediately transferred to Gumiho. Gumiho's common stock was trading at P20 per share atthe time of exchange. Following selected information is also available.Par value of shares outstandingAdditional Paid-in CapitalBefore AcquisitionP400,000P700,000After AcquisitionP500,000P1,100,000Based on the proceeding information, what is the number of shares was issued at the time of the exchange?25,00035,00020,00010,000The Alhambra Company had these accounts at the time it was acquired by Kingdom Co.:CashP 108,000Accounts Receivable1,371,000Inventories360,000PPE1,948,200Accounts Payable1,052,400Kingdom Co. paid P4,200,000 for net assets of Alhambra Company. It has determined the fair market valuesof investment and PPE were P399,000 and P2,700,000, respectively.An assumed contingent liability arising from past events with a fair value amounting to P30,000 and suchamount is considered a reliable measurement.In the books of Kingdom Co., this transaction resulted in:Current Assets increased by P704,400Retained Earnings increased by P704,400Goodwill recorded at P704,400Goodwill recorded at P1,324,200

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Gumiho Corporation acquired Forest Company through an exchange of common shares. All of Forest's assets and liabilities were immediately transferred to Gumiho. Gumiho's common stock was trading at P20 per share at the time of exchange. Following selected information is also available. Before Acquisition P400,000 After Acquisition P500,000 Par value of shares outstanding Additional Paid-in Capital P700,000 P1,100,000 Based on the proceeding information, what is the number of shares was issued at the time of the exchange? 25,000 35,000 20,000 10,000

Gumiho Corporation acquired Forest Company through an exchange of common shares. All of Forest's assets and liabilities were immediately transferred to Gumiho. Gumiho's common stock was trading at P20 per share at the time of exchange. Following selected information is also available. Before Acquisition P400,000 After Acquisition P500,000 Par value of shares outstanding Additional Paid-in Capital P700,000 P1,100,000 Based on the proceeding information, what is the number of shares was issued at the time of the exchange? 25,000 35,000 20,000 10,000

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 1BCRQ

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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. 2,450,000
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