On January 1, 2021, ABC acquired all the assets and assumed all the liabilities of DEF Co. for P4,500,000. Relevant informationfollows:ASSETSFair ValuesCarrying Value55,000Cash55,000800,000Receivable800,000Allowance for Doubtful Accounts150,000700,0003,500,000150,000180,000750,0004,000,000200,0001,555,0000InventoryLandGoodwillLiabilities1,555,000DEC Co. has research and development projects with fair value of P100,000. ABC does not intend to use those R&Ds.However, there have been exchange transactions involving the information generated from DEF, but those transactions areinfrequent.> All fair value adjustments result to temporary differences but do not affect the tax bases of the assets and liabilities. Thetax rate is 30%.ABC incurred P200,000 on general administrative costs of maintaining an internal acquisition department.Compute the goodwill (gain on bargain purchase)? The following are the balances of BIG Company and GIRL Company as of January 1, 20x1.FairFairВookВookBIG COMPANYMarketMarketValueValueValueValueASSE TSLIABILITY AND EQUITY105,000 Accounts Payable470,000 Mortgage Payable300,000 Ordinary Share, 20 par 2,000,000Cash105,000300,000330,000Accounts Receivable550,0001,300,000 1,320,000InventoryProperty, Plant and Equipment, net220,0004,790,000 4,500,000 Share Premium?775,000?Goodwill100,000100,000 Retained Earnings1,390,000?FairВookFair MarketВookGIRL COMPANYMarketValueValueValueValueCash300,000300,000 Accounts Payable550,000500,000Accounts Receivable600,000470,000 Mortgage Payable300,000 Ordinary Share, 20 par2,500,000 2,480,000350,0008,910,000 10,000,000 Share PremiumInventory3,000,000?Property, Plant and Equipment, net2,760,000?Goodwill150,000100,000 Retained Earnings1,500,000The companies combined their resources and formed BIGGEST Co. Research and development with a fairmarket value of P120,000 was not included in the books of Big Company. An unrecorded interest payableworth P20,000 was also not included in the books of Girl Company. The new company issues 16,000 sharesof 500 par value common stocks with fair value of P550 and pays additional 1,500,000 and incurs a mortgageloan of P1,000,000. The company also paid a direct costs of 50,000 and indirect cost of 20,000. P15,000direct cost and P5,000 stock issue cost remain unpaid. Chan Co. also pay BIG and GIRL additional P100,000net income after 1 year if its net income exceed P3,000,000, there is a 90% chance of meeting the targetincome. Determine the total EQUITY of BIGGEST CO. immediately after the business combination.

Given questions deal with IFRS 3 ' business combination'. The first question deals with…

Answered: income after 1 year if its net income…

income after 1 year if its net income exceed P3,000,000, there is a 90% chance of meeting the t ome. Determine the total EQUITY of BIGGEST CO. immediately after the business combination.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 30BEB: Klynveld Companys balance sheet shows total liabilities of 94,000,000, total stockholders equity of...

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XYZ’s balance sheet and income statement are given below:Balance SheetCash 50 Accounts payable 100A/R 150 Notes payable -Inventories 300 Long-term debt (10%) 700Fixed assets 500 Common equity (20 shares) 200Total assets 1,000 Total liabilities and equity 1,000Income StatementSales 1,000Cost of goods sold 855EBIT 145Interest 70EBT 75Taxes (33.33%) 25Net income 50The industry average inventory turnover is 5, the interest rate on the firm’s long-term debt is 10percent, 20 shares are outstanding, and the stock sells at a P/E of 8.0. If XYZ changed its inventorymethods so as to operate at the industry average inventory turnover, if it used the funds generated bythis change to buy back common stock at the current market price and thus to reduce common equity,and if sales, the cost of goods sold, and the P/E ratio remained constant, by what dollar amount wouldits stock price increase?
The data below are from the records of Gomez, Inc. on December 31, 20x1:Accounts payable P720,000Cash balance, ABC Bank 1,120,000Cash overdraft with XYZ Bank 130,000Customers’ accounts with credit balances 50,000Dividends in arrears on preference shares 450,000Employees’ income tax payable 200,000Estimated warranty liability 80,000Estimated premium claims outstanding 75,000Income tax payable 480,000Notes Payable (issued in 20x1 maturing in semi-annualinstallments beginning April 1, 20x2 for 20 years) 4,000,000Salaries payable 320,000Required: 1. What amount shall be reported as total current liabilities on Gomez, Inc.’s statement of financial positionat December 31, 20x1
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Klynveld Companys balance sheet shows total liabilities of 94,000,000, total stockholders equity of 75,000,000, and total assets of 169,000,000. Required: Note: Round answers to two decimal places. 1. Calculate the debt ratio. 2. Calculate the debt-to-equity ratio.
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A Corporation had the following data concerning selected financial data taken from the records listed below.For the year ended December 312021 2020Cash 80,000 640,000Note and account receivable 400,000 1,200,000Merchandise Inventory 720,000 1,200,000Marketable Securities 240,000 80,000Land and Building (net) 2,720,000 2,880,000Bond Payable 2,160,000 2,240,000Account Payable 560,000 880,000Note Payable Short Term 160,000 320,000Sales (20% cash, 80% credit) 18,400,000 19,200,000Cost of Good Sold 8,000,000 11,200,000Required : Compute the following ratios1. current ratio as of December 31,20212. Quick ratio as of December 31, 20213. Account Receivable Turnover ratio for 20214. Merchandise inventory turn over for 20215. The Gross margin for 20206. the average age of account Receivable for 2021( use 360 days
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The following selected information are made available by AAA company for the current year: Accounts Payable120,000 Bonds Payable 800,000 Warranty payable200,000 Total Liabilities1,300,000 Net Sales1,650,000 Total Assets2,200,000 In the common size statement of financial position, prepaid expense will have a proportional percentage of bonds payable? The total Noncurrent asset of CAM Company is P1,000,000 and the Equity is 1,200,000. The company has no liabilities during the period. If cash and cash equivalent is 500,000, what will be its proportional percentage in the common-size statement of financial position?
The balance sheet for Shankland Corporation follows: 000'009 $ 000006 Current assets Long-term assets (net) Total assets Current liabilities Long-term liabilities Total liabilities Common stock and retained earnings 000 0000 000 00 000 009' 000 006 Total liabilities and stockholders' equity 000'00s Required Compute the following. (Round "Ratios" to 1 decimal place.) Working capital Current ratio Debt-to-assets ratio Debt-to-equity ratio
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