On January 1, 2021, BENI Co. issued shares of its P5 par value share capital to acquire all the net assets of PATTY Company, which was liquidated immediately thereafter. Cost of issuing equity instruments amounting to P5,000 were incurred and paid by BENI Co., aside from the indirect acquisition costs amounting P3,000. The Statement c Financial Position for BENI Co. and the Statement of Financial for the combined company under the purchase method are presented below. BENI CO. Combined BENI CO. Combined Cash 100,000 Accounts Payable 180,000 Bonds Payable 220,000 Ordinary Share Capital 175,000 Share Premium 550,000 Retained Earnings 150,000 70,000 40,000 60,000 Accounts Receivable 130,000 160,000 100,000 200,000 Inventory 100,000 240,000 Land 100,000 60,000 420,000 Buildings and Equipment Accumulated Depreciation 400,000 250,000 247,000 150,000 Goodwill 52,000 Shortly after the above information was complied, a fire destroyed the accounting records. You have been employed to determine the fair value of the shares issued by BENI Co. to acquire PATTY.

On January 1, 2021, BENI Co. issued shares of its P5 par value share capital to acquire all the net assets of PATTY Company, which was liquidated immediately thereafter. Cost of issuing equity instruments amounting to P5,000 were incurred and paid by BENI Co., aside from the indirect acquisition costs amounting P3,000. The Statement c Financial Position for BENI Co. and the Statement of Financial for the combined company under the purchase method are presented below. BENI CO. Combined BENI CO. Combined Cash 100,000 Accounts Payable 180,000 Bonds Payable 220,000 Ordinary Share Capital 175,000 Share Premium 550,000 Retained Earnings 150,000 70,000 40,000 60,000 Accounts Receivable 130,000 160,000 100,000 200,000 Inventory 100,000 240,000 Land 100,000 60,000 420,000 Buildings and Equipment Accumulated Depreciation 400,000 250,000 247,000 150,000 Goodwill 52,000 Shortly after the above information was complied, a fire destroyed the accounting records. You have been employed to determine the fair value of the shares issued by BENI Co. to acquire PATTY.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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