APTER 5: SPECIAL TOPICS ON15. On January 2, 2020 Small Company issued 5 shares in exchangeeeach ordinary share of Big Company. The fair value of Big Company'sshares is P275.The Statement of Financial Position of the combining entitiesimmediately before the combination show the following:BigCompany12,000SmallCompany6,500Assets2,5005,800LiabilitiesShare Capital100 ordinary shares80 ordinary sharesRetained earningsTotal liabilities and equity1,0002,0003,0004,2006,50012,000On January 2, 2020, Small Company's identifiable assets andliabilities have fair values of P7,000 and P2,500, respectively.The resulting goodwill in the reverse acquisition assuming 100% ofBig Company's shares were exchanged for Small Company's share is:a. P500b. P1,000с. Р1,500d. P1,250

Goodwill - When ownership of a company is transferred as a continuing concern, goodwill is a type of…

Answered: APTER 5: SPECIAL TOPICS ON 15. On…

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

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IUuwvie t0 Accountancy Company is: a. P393,000 b. P376,500 c. P390,000 d. P406,500 11. 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, P222,5000. 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…
Proble.n 16-15 (PHILCPA Adapted) Heste Company invested in shares of another entity. Number of shares Cost 2018 2019 20,000 40,000 2,000,000 3,500,000 In 2020, the entity received 60,000 rights to purchase one share at P80. Five rights are required to purchase the share. At issue date, rights had a market value of P5 each. The entity used rights to purchase 10,000 additional shares of the investee and allowed the rights not exercised to lapse. What amount was debited to investment account for the purchase of the additional new shares? 1,100,000 b. 1,050,000 a.: 800,000 900,000 C, d.
Benevolent Company had the following transactions: 2020 Aug. 1Purchased 1,000 shares of Star Company for P60,000. Oct. 1Purchased 8,000 shares of Star Company for P560,000. 2021 July 1Purchased 6,000 shares of Star Company for P480,000. Oct. 1Sold 5,000 shares of Star Company for P500,000. Use FIFO. 2022 Feb. 1Received 50% share dividend.Nov. 1Received share rights to purchase one new share at P60 for every 5rights tendered. On this date, the right is quoted at P10. Dec. 1Sold all share rights at P15 per right. Required:a.Prepare journal entries to record the transactions using average and FIFO. The share rights are accounted forseparately
Coporation completed the following transactions realting to investment in other company ordinary shares which were acuired for trdaing purposes2019 Purchased 1000 shares at 150 per share plus transaction costs of 3750 At year end other company ordinary share had a fair value of 180 per share 2020 sold 500 of other company ordinary shares for a total of 94000 at year end FV of each share was 192 On date of purchase of the invcestmebnt, the amount debited to asset account is?the total net amunt reported in 2019 profit or loss is? ]the current assets at dec 31 20919 will report the value investment at? The total amount reported in 2020 profit and loss is? the total amount reported in 2020 OCI is?
Item No. 11 is based on the following information: air IE sedmeo90 000,002 9 6 000,048 9 42 d Alpha Company was incorporated at the beginning of this year with the following authorized capitalization: 15.39.d M2.9 termotr and on 21 o 200,000, 10% cumulative preference shares, par P 50; and sqmo) sinan to 1009 o 200,000 ordinary shares, no-par, P 100 stated value shares. 9V91- During the year, Alpha issued 50,000 preference shares at P 60 per share and 150,000 ordinary shares for a total of P 18,000,000. In addition, subscriptions for 20,000 preference shares were taken in December this year at a purchase price of P 100 per share. These subscribed shares will be paid in ! January next year. Profit for this year was P 5,000,000. I 11. What should Alpha report as total contributed capital on its balance sheet as at December 31 this year? c. P 26,000,000.22.09 I a. P 21,000,000. [ d. P 28,000,000. b. P 23,000,000.),81 9 OH 20
Refer to the following: On December1.20x1, Line Corp recelvud ecoration.of 2 000 shees dfiS P5 par value ordinary shareS from a shareholder On that date, the sk s narket y K was Pper share The stock was or gnaly issued for P25 per share By what anGut wauld B denorcHe lotal stckholders eguly to decrcase? 50,000 20,000 O 70,000
0. Duing ih frst year of operationa. Victory, Inc. entered into the tollwing transactions retating to shareholders' equity, PIO por per share and 30.000 preference shares P50 par pet share, > March 14-Sold 50.000 crdinary shares for F100 per shore > Morch 15- Issued 20.000 orcinary shares ta lawyers in exchange tor legal services omiounting to P 300,000, > Morch 15- Sold 35.000 ot its ordinary shares ond 10,000 preference shares for P6.000,000. Fair value of the ordinary shore in PICO. November 20- hued 1.900 of ih ovdnary shares in exchange for equipmient for which the cauh price was known to be PI85.000. Baed on the preceding information, determine the totai shareholders' equity. , Victory's articles of incorporation authorized the issue of 240,000 ordinary shares.
12. On January 1.2020. Animosity Compony purchased 50000 shares of another enfify for P3,800,000. On October 1,2020, frie enfify ieceived 50,000 stock rghts Trom the investee. Each right entities the holder to acquire one share for P80. he market price of investee's stiares wos Pi00 mmediafely before fhe rights were- 15Sued and P90 immediotely ofter the rights were issued. On December 1.2020. ihe entity exercised aff stock rights. On Decembe 31,2020, the antity sold 25,000 shares at P90per share. The stock rights are not accounted for separately. If the FIFO approach is used.whatis the gain on sale of investment that should be recognized in 20207 a. 350.000 b. 300,000
AB Co issues 5.000 50c shares for $6.000. Required: What are the amounts for share capital and share premium in the statement of financial position?
Answer with computation and explanation If the total authorized share capital is P1,000,000 at P10 par, the unissued share capital is 25,000 shares, and all the issued shares were sold at P15, then the total shareholders' equity before any operation activities is a 2 750,000. b P1,125,000 c. P375,000. d. P250,000.
Problem no. 1 ABC Corporation has the following transactions throughout the year of 2020: Jan ABC Corporation received its certificate of incorporation from Securities and Exchange Commission. From its submitted Articles of Incorporation, the corporation has a total of authorized share capital of P10,000,000.00 divided into 1,000,000 ordinary shares with par value of P10.00. Out of the total authorized share capital, 30% has been fully paid and issued at P11.00 per share to incorporators. The company incurred P120,000 directly related to the issuance of shares. Feb 1 Mr. Z, an investor, subscribed 20,000 shares at a subscription price of P15.00. ABC has collected 20% of the total subscription price and remaining balance payable within 10 days. 5 ABC issued 140,000 shares at P17.00 per share. ABC issued 40,000 shares in exchange for equipment. The fair value of the shares is P11.00 and the fair value of the equipment is P480,000. 28 9 ABC issued 30,000 shares for payment of legal…
Problem no. 1 ABC Corporation has the following transactions throughout the year of 2020: Jan ABC Corporation received its certificate of incorporation from Securities and Exchange Commission. From its submitted Articles of Incorporation, the corporation has a total of authorized share capital of PI0,000,000.00 divided into 1,000,000 ordinary shares with par value of P10.00. Out of the total authorized share capital, 30% has been fully paid and issued at P11.00 per share to incorporators. The company incurred P120,000 directly related to the issuance of shares. Feb 2 Mr. Z, an investor, subscribed 20,000 shares at a subscription price of P15.00. ABC has collected 20% of the total subscription price and remaining balance payable within 10 days. 5 ABC issued 140,000 shares at P17.00 per share. ABC issued 40,000 shares in exchange for equipment. The fair value of the shares is P11.00 and the fair value of the equipment is P480,000. 28 ABC issued 30,000 shares for payment of legal…

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