During the next fiscal year endìng June 30, 2020, Texas Company will make tantial investments in new product lines and in a modernization program. Significant changes to be made during the year are listed below: 1 Equipment with a net book value of P86,000 will be sold during the year. 2 All of the capital stock of Ohio Company will be exchanged with 5,000 shares of Texas Company at a time when the market value is P40 per share. P250,000 cash will also be given as part payment. 3. Bonds having a face value of P1,000,000 will be issued on June 30, 2020 at 98%. 4. Trading securities carried at market value of P200,000 will be sold for P215,000. 5. New equipment will be purchased during the year. 6. A new building will be purchased at a cost of P1,000,000, although there are no building retirements. 1. Cash dividends wil! be paid to stockholders. The financial statements forecast for the year ended June 30, 2020 are given next page:
During the next fiscal year endìng June 30, 2020, Texas Company will make tantial investments in new product lines and in a modernization program. Significant changes to be made during the year are listed below: 1 Equipment with a net book value of P86,000 will be sold during the year. 2 All of the capital stock of Ohio Company will be exchanged with 5,000 shares of Texas Company at a time when the market value is P40 per share. P250,000 cash will also be given as part payment. 3. Bonds having a face value of P1,000,000 will be issued on June 30, 2020 at 98%. 4. Trading securities carried at market value of P200,000 will be sold for P215,000. 5. New equipment will be purchased during the year. 6. A new building will be purchased at a cost of P1,000,000, although there are no building retirements. 1. Cash dividends wil! be paid to stockholders. The financial statements forecast for the year ended June 30, 2020 are given next page:
Chapter1: Financial Statements And Business Decisions
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