On December 1, 2020, Stan Lee Company acquired all of Marvel Inc.’s P2,150,000 identifiable assets and P530,000 liabilities. Book values of the Marvel’s assets and liabilities approximate their fair values except for an overvalued fixture. To acquire the net assets of Marvel, Stan issued its own shares of stock with a market value of P1,715,000 plus cash of P375,000. A contingent consideration of P150,000 is established on the date of acquisition. The business combination resulted to a P650,000 goodwill. Assuming Stan had total assets of P4,890,000 and total liabilities of P2,731,000 prior to the combination, how much is the total assets after the business combination if no additional cash payments were made, but expenses were incurred for related costs amounting to P28,000? After the business combination, how much is the increase in the liabilities of Stan?

On July 1, 2019, Killearn Company acquired 105,000 of the outstanding shares of Shaun Company for $19 per share. This acquisition gave Killearn a 40 percent ownership of Shaun and allowed Killearn to significantly influence the investee’s decisions.   As of July 1, 2019, the investee had assets with a book value of $5 million and liabilities of $1,101,500. At the time, Shaun held equipment appraised at $280,000 more than book value; it was considered to have a seven-year remaining life with no salvage value. Shaun also held a copyright with a five-year remaining life on its books that was undervalued by $650,000. Any remaining excess cost was attributable to goodwill. Depreciation and amortization are computed using the straight-line method. Killearn applies the equity method for its investment in Shaun.   Shaun's policy is to declare and pay a $1 per share cash dividend every April 1 and October 1. Shaun's income, earned evenly throughout each year, was $640,000 in 2019, $670,600 in…

Ed Company acquired the assets and assumed the liabilities of Sheeran Inc. on June 30, 2022. The consideration transferred by the acquirer were as follows:  Cash amounting to P2,000,000.Issued 10,000 ordinary shares at P10 par with a market price of P15.Issued 5 year interest bearing bonds payable with a face value of P3,000,000 with a nominal rate of 10% and effective interest of 12%. (use two decimal places for the present value factor)  Acquisition related costs incurred were as follows:  Legal fees amounting to P120,000, 70% of which is not yet paid.Share issue costs paid amounted to P15,000.Bond Issue costs paid amounting to P120,000.  The Balance Sheet of the two entities before acquisition were as follows:    Taylor Company Swift Inc. Total Assets  16,500,000 5,235,000 Total Liabilities  2,500,000 500,000 Ordinary Shares  5,000,000 1,250,000 Share premium  1,500,000 750,000 Retained Earnings 6/30/22 7,500,000 2,735,000     It…

On January 1, 2021, Pancake Co. bought 250,000 ordinary shares of House Co. for P3,000,000, representing 25% of the outstanding shares of House, and allowing Pancake to exercise significant influence over House. Pancake has determined that the book value of House's net assets approximates its fair value. During 2021, House earned a net income of P4,000,000. The entity also declared and paid total cash dividends of P1,000,000 during the year. At the end of the year, there was objective evidence of impairment for the shares. The recoverable amount was determined to be at P2,900,000.