When the investor pays $100,000 to acquire 40% of a company's outstanding voting shares at a time when the fair value of the company's net assets are $175,000, the resulting goodwill amount is $30,000. True or False True False
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When the investor pays $100,000 to acquire 40% of a company's outstanding voting shares at a time when the fair value of the company's net assets are $175,000, the resulting
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- Use the following facts for Multiple Choice problems 28 and 29: Assume on January 1, 2022, the investor company issued 10,000 new shares of the investor company's com- mon stock in exchange for all of the individually identifiable assets and liabilities of the investee company. The investee company qualifies as a business. Fair value approximates book value for all of the investee's identifiable net assets. The transaction resulted in no goodwill or bargain purchase gain. The following financial statement information is for an investor company and an investee company on January 1, 2022, prepared immediately before this transaction. Receivables & inventories Land. Property & equipment... Total assets.... Liabilities... Common stock ($1 par) Additional paid-in capital. Retained earnings. Total liabilities & equity. Net Assets **** 28. Asset acquisition (fair value equals book value) What is the per share fair value of the investor's common stock? . c. $42.00/share d. $58.80/share a.…ACE Ltd has an outstanding shares of 10,000,000 shares. Kimmy Ltd purchases 100,000 shares of ACE Ltd at $4 per share. Transaction cost is $1,000. How much will the company capitalise if the investment is classified at fair value through OCI? Choose one of the following answers. 401,000 None of the above 399,000 400,000If Alakdan Co., a new company would acquire the net assets of Cardo and Allana Company by issuing 50,000 shares of P25 par value ordinary shares with fair value of P130 per share and paying professional finders fee and stock registration costs of P125,000 and P65,000, respectively, determine:i. The total amount of Goodwill to be reported by Alakdan Co.ii. The total assets of Alakdan Co. after the business combination.iii. The total stockholders equity of Aklan Co after the business combination.iv. The journal entries to be made by Alakdan Co. for the business combination.
- Z Corporation has the following transactions relating to its investment during 2020: Jan 5 Acquired 16,000 shares of Y company for P1,500,000 paying an additional P10,000 for brokerage and P5,000 for commission. Feb 14 Received dividends from Y company declared January 10,2020 to the stockholders of records January 31,2020, P16,000. Required:prepare all the necessary entries assuming the investment is 1. Financial asset at Fair Value through profit and loss 2. Financial asset at Fair Value through other comprehensive incomeOn May 20, Montero Co. paid $150,000 to acquire 30 shares (4%) of ORD Corp. as a long-term investment. On August 5, Montero sold one-tenth of the ORD shares for $18,000. 1. Prepare entries to record both (a) the acquisition and (b) the sale of these shares. 2. Should this stock investment be reported at fair value or at cost on the balance sheet?6. On January 1, 2020, PQR Company purchased 40,000 shares of Frank, Inc. at P100 per share. The investment is measured at fair value through other comprehensive income. Brokerage fees amounted to P120,000 were also paid by PQR. A P5 dividend per share was declared by Frank, Inc. on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. What is the initial measurement of the investment in Frank, Inc.?
- On 8 August 20x3, alpha Ltd acquired 20000 shares in Beta Ltd (Beta) that gave alpha control over Beta in return for 10000 of its own shares. at that date, Alpha's Shares had a market value of $2.70 each, while Beta's Share had a market value of $1.30 each. Fees paid to legal advisers for the transaction totalled $2000. What is the fair value of the consideration transferred?An investor purchases a 30% interest in an investee company, and the investor concludes that it can exert significant influence over the investee. The book value of the investee’s Stockholders’ Equity on the acquisition date is $400,000, and the investor purchases its 30% interest for $156,000. The investor is willing to pay the purchase price because the investee owns an unrecorded (internally developed) patent that the investor estimates is worth $120,000. The patent has a remaining useful life of 10 years. Subsequent to the acquisition, the investee reports net income of $90,000, and pays a cash dividend to the investor of $13,000. At the end of the first year, the investor sells the Equity Investment for $195,000. Prepare all of the required journal entries to account for this Equity Investment during the year. how to record the amortization expense and sales of investment. Please don't provide answer in image format thank youPLease show the complete solution. Thank you Mashiho Company acquires 18% of Junkyu Company’s stock for P700,000 cash and carries the investment as a financial asset. A few months later, Mashiho purchases another 70% percent of Junkyu Company’s stock for P2,520,000. At the said date, Junkyu Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,250,000. Its liabilities have a book and fair values of P1,500,000 and 1,900,000, Required: Determine the amount of goodwill or gain on bargain purchase that should be recognized if the non- controlling interest is measured on a proportionate Determine the amount of goodwill or gain on bargain purchase that should be recognized if the non- controlling interest is measured on a fair value
- 9. If ABC Co purchases the net assets of XYZ Co by issuing 50,000 shares of their P20 par value ordinary shares with a fair value of P30 per share and paying professional fees to arrange the acquisition amounting to P20,000; legal fees of P30,000; costs for maintaining the acquisition of the department, P30,000; cost of registering the securities, P25,000 and cost of issuing the securities, P15,000. Parent also determines contingent consideration to be paid in the future amounting to P100,000 on the date of acquisition but could go as high as P150,000. From the data, determine the total amount of share premium to be reported by ABC Co after the acquisition. *On 8 August 20X3, Alpha Ltd (Alpha) acquired 20 000 shares in Beta Ltd (Beta) that gave Alpha control over Beta in return for 10 000 of its own shares. At that date, Alpha’s shares had a market value of $2.70 each, while Beta’s shares had a market value of $1.30 each. Fees paid to legal advisers for the transaction totalled $2000. What is the fair value of the consideration transferred? a. $29 000 b. $26 000 c. $28 000 d. $27 000Company A considers acquiring company B. Shares of the company A trade at $30 and there are 5,000 of A shares outstanding. Company B has 200 shares outstanding worth $100 each. If A acquires B, then the resulting synergy will amount to $10,000. Suppose A offers to exchange every B's share for $130 in cash. What will be the total benefit for the existing shareholders of B?