FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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On January 1, 20x1, DIAPHANOUS Co. acquired all of the identifiable assets and assumed all of the liabilities of TRANSPARENT, Inc. by paying cash of ₱4,000,000. On this date, the identifiable assets acquired and liabilities assumed have fair values of ₱6,400,000 and ₱3,600,000, respectively. Additional information:In addition to the business combination transaction, the following have also transcribed during the negotiation period:a. After the business combination, TRANSPARENT will enter into liquidation and DIAPHANOUS agreed to reimburse TRANSPARENT for liquidation costs estimated at ₱80,000.b. DIAPHANOUS agreed to reimburse TRANSPARENT for the appraisal fee of a building included in the identifiable assets acquired. The agreed reimbursement is ₱40,000.c. DIAPHANOUS entered into an agreement to retain the top management of TRANSPARENT for continuing employment. On acquisition date, DIAPHANOUS agreed to pay the key employees signing bonuses totaling ₱400,000.d. To persuade, Mr. Five-six Numerix, the previous major shareholder ofTRANSPARENT, to sell his major holdings to DIAPHANOUS, DIAPHANOUS agreed to pay an additional ₱200,000 directly to Mr. Numerix.e. Included in the valuation of identifiable assets are inventories withfair value of ₱360,000. Ms. Vital Statistix, a former major shareholderof TRANSPARENT, shall acquire title to the goods. How much is the
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