Bagz-bags Corp. issued on March 31, 2032, 400,000 shares of its P12 par value ordinary shares,P40 market value per share, to acquire all of the outstanding P25 par value ordinary shares ofShu-shoes Corporation and 110,000 shares of the same P12 par ordinary shares for alloutstanding P50 par value ordinary shares of Accessory Corp. on this date, the fair value of Shu-shoes's assets and liabilities equaled their book values, except for the longterm investment inmarketable equity securities for which the aggregate market value exceeded cost by P500,000.The fair value of Accessory's assets and liabilities equaled their book values except for property.plant and equipment which is P700,000 less than the carrying value and inventories which isP100,000 more than carrying value.On March 31, 2032, immediately before the combination, the shareholders' equities were:Shu-shoes Corp.Accessory Corp.Ordinary Shares. P5,500,000.P2,500,000Share Premium. 4,200,000470,000Retained Earnings. 7,360,000.2,430,000Total.P17,060,000.P5,400,0001) The goodwill as a result of the combination is2) The gain on acquisition to be recorded in the books of Bagz-bags Corp. (result of thecombination) is.3.) The total Shareholders' Equity of the subsidiary companies ( from their separatefinancial statements) at the date of acquisition is .

A business combination occurs when two or more separate entities merge to form a single entity or…

1) The goodwill as a result of the combination is 2) The gain on acquisition to be recorded in the books of Bagz-bags Corp. (result of the combination) is 3.) The total Shareholders' Equity of the subsidiary companies (from their separate financial statements) at the date of acquisition is_

1) The goodwill as a result of the combination is 2) The gain on acquisition to be recorded in the books of Bagz-bags Corp. (result of the combination) is 3.) The total Shareholders' Equity of the subsidiary companies (from their separate financial statements) at the date of acquisition is_

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter8: Consolidated Tax Returns

Section: Chapter Questions

Problem 36P

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On January 1, 2022, P Corp. purchased 80% of S Co.'s P10 par ordinary shares for P986,000. On this date, the carrying amount of S's net assets was P1,000,000. The fair values of S Co.'s identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net), which were P120,000 in excess of the carrying amount. The estimated remaining life of the asset is 5 years. For the year ended December 31, 2022, S had net income of P290,000 and paid cash dividends totaling P125,000. Loss on impairment of goodwill in 2022 amounted to P20,000. P Corp. uses the proportionate method in measuring non-controlling interest. Determine the non-controlling interest in consolidated net income on December 31, 2022.
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
On January 2, 2021 PAMIGAY CORP paid P380,000 cash and issued 120,000 new shares of its P5 par value common stock valued at P20 a share for all of SAYO CORP’s outstanding common shares in an acquisition. PAMIGAY CORP paid P15,000 for registering and issuing securities and P10,000 for other direct costs of the business combination. The fair value and book value of SAYO CORP’s identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2021 is as follows: PAMIGAY CORP SAYO CORP Cash P 1,150,000 P 120,000 Inventories 320,000 400,000 Other current assets 500,000 500,000 Land 350,000 250,000 PPE, net 2,500,000 1,400,000 Goodwill 500,000 100,000 Total Assets P 5,320,000 P 2,770,000 Accounts payable P1,000,000 P 300,000 Notes payable 1,300,000 660,000 Capital stock, P5 par 2,000,000 500,000…
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
On January 2, 2021 PAMIGAY CORP paid P380,000 cash and issued 120,000 new shares of its P5 par value common stock valued at P20 a share for all of SAYO CORP’s outstanding common shares in an acquisition. PAMIGAY CORP paid P15,000 for registering and issuing securities and P10,000 for other direct costs of the business combination. The fair value and book value of SAYO CORP’s identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2021 is as follows: How much is the cash to be presented on the consolidated statement of financial position as of the date of acquisition? a. 1,150,000 b. 865,000 c. 1,245,000 d. 1,270,000
On January 2, 2021 PAMIGAY CORP paid P380,000 cash and issued 120,000 new shares of its P5 par value common stock valued at P20 a share for all of SAYO CORP’s outstanding common shares in an acquisition. PAMIGAY CORP paid P15,000 for registering and issuing securities and P10,000 for other direct costs of the business combination. The fair value and book value of SAYO CORP’s identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2021 is as follows: PAMIGAY CORP SAYO CORP Cash P 1,150,000 P 120,000 Inventories 320,000 400,000 Other current assets 500,000 500,000 Land 350,000 250,000 PPE, net 2,500,000 1,400,000 Goodwill 500,000 100,000 Total Assets P 5,320,000 P 2,770,000 Accounts payable P1,000,000 P 300,000 Notes payable 1,300,000 660,000 Capital stock, P5 par 2,000,000 500,000…
On January 2, 2021 PAMIGAY CORP paid P380,000 cash and issued 120,000 new shares of its P5 par value common stock valued at P20 a share for all of SAYO CORP’s outstanding common shares in an acquisition. PAMIGAY CORP paid P15,000 for registering and issuing securities and P10,000 for other direct costs of the business combination. The fair value and book value of SAYO CORP’s identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2021 is as follows:    PAMIGAY CORP SAYO CORP Cash P 1,150,000 P 120,000 Inventories 320,000 400,000 Other current assets 500,000 500,000 Land 350,000 250,000 PPE, net 2,500,000 1,400,000 Goodwill 500,000 100,000 Total Assets P     5,320,000 P     2,770,000          Accounts payable P1,000,000 P 300,000 Notes payable 1,300,000 660,000 Capital…
On January 2, 2021 PAMIGAY CORP paid P380,000 cash and issued 120,000 new shares of its P5 par value common stock valued at P20 a share for all of SAYO CORP’s outstanding common shares in an acquisition. PAMIGAY CORP paid P15,000 for registering and issuing securities and P10,000 for other direct costs of the business combination. The fair value and book value of SAYO CORP’s identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2021 is as follows: PAMIGAY CORP SAYO CORP Cash P 1,150,000 P 120,000 Inventories 320,000 400,000 Other current assets 500,000 500,000 Land 350,000 250,000 PPE, net 2,500,000 1,400,000 Goodwill 500,000 100,000 Total Assets P     5,320,000 P     2,770,000 Accounts payable P1,000,000 P 300,000 Notes payable 1,300,000 660,000 Capital stock, P5 par 2,000,000 500,000…
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YSL Corporation acquired 80% of the outstanding ordinary shares of GBX Company on June 1, 2022 for P586,250. GBX Company’s shareholder’s equity components at the end of this year were as follows: Ordinary shares, P100 par, P250,000; Share premium, P112,500 and Retained earnings, P222,500.Non-controlling interest (NCI) is measured at fair value. All the assets of GBX were fairly valued, except for inventories, which is overstated by P11,000 and equipment, which is understated by P15,000. Remaining useful life of equipment is 4 years. Both companies use straight line method for depreciation and amortization.Shareholder’s equity of YSL on January 1, 2022 is composed of Ordinary shares, P750,000; Share premium, P175,000 and Retained earnings, P525,000.Fair value of NCI on the date of acquisition is P117,500. Goodwill, if any, should be written down by P14,225 at year end. Net income for the first year of parent and subsidiary are P75,000 and P42,500 (from date of acquisition),…
YSL Corporation acquired 80% of the outstanding ordinary shares of GBX Company on June 1, 2022 for P586,250. GBX Company’s shareholder’s equity components at the end of this year were as follows: Ordinary shares, P100 par, P250,000; Share premium, P112,500 and Retained earnings, P222,500.Non-controlling interest (NCI) is measured at fair value. All the assets of GBX were fairly valued, except for inventories, which is overstated by P11,000 and equipment, which is understated by P15,000. Remaining useful life of equipment is 4 years. Both companies use straight line method for depreciation and amortization.Shareholder’s equity of YSL on January 1, 2022 is composed of Ordinary shares, P750,000; Share premium, P175,000 and Retained earnings, P525,000.Fair value of NCI on the date of acquisition is P117,500. Goodwill, if any, should be written down by P14,225 at year end. Net income for the first year of parent and subsidiary are P75,000 and P42,500 (from date of acquisition),…
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