It should be noted that bargain purchase gain would arise only in exceptional

It should be noted that bargain purchase gain would

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It should be noted that bargain purchase gain would arise only in exceptional circumstances. Therefore, before determining that gain has arisen, the acquirer has to: 1. Reassess whether it has correctly identified all of the assets acquired and all of the liabilities assumed. The acquirer should recognize any additional assets or liabilities that are identified in that review. 2. Any balance should be recognized immediately in profit or loss. 52. b – no valuation to be recorded in the books of the acquirer Cost P180,000 Less: Accumulated depreciation (P180,000/30 years = P6,000/year x 3 yrs 18,000 Net book value P162,000 53. c Net Assets [P100,000 + P50,000 + P162,000 (No. 54)] P312,000 Less: Shares issued at par (15,000 shares x P10 par) 150,000 APIC P162,000 Or: since, there is no excess, the P312,000 represents the amount of consideration transferred, therefore the APIC should be P162,000 [P312,000 / 15,000 shares = P20,80 – P15 = P10.80 x 15,000 shares) 54. c The consideration transferred should be compared with the fair value of the net assets acquired, per PFRS3 par. 32. The gain of P8 million results from a bargain purchase and should be recognized in profit or loss, per PFRS3 par. 34. 55. c
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Consideration transferred: Shares: 2/3 x 60,000 x P3.20 128,000 Cash Accounts payable 45,100 Mortgage and interest 44,000 Debentures and premium 52,500 Liquidation expenses 2 , 400 144,000 Cash held (12 , 000) 132 , 000 260 , 000 Less: Fair value of assets and liabilities acquired: Accounts receivable P34,700 Inventory 39,000 Freehold land 130,000 Buildings 40,000 Plant and equipment 46 , 000 289,700 Bargain Purchase Gain 29,700 56. d PFRS 3 (2008) par. 18 requires an identifiable assets and liabilities assumed are measured at their acquisition-date fair values. 57.c Selling price P 110,000 Less: Book value of Comb (P50,000 + P80,000 + P40,000 - P30,000) 140,000 Loss on sale of business by the acquiree (Comb) P( 30,000 ) 58 . d P215,000 = P130,000 + P85,000 59 . b P23,000 = P198,000 – (P405,000 - P265,000 + P15,000 + P20,000) 60 . c P1,109,0 00 = Total Assets of TT Corp. P 844,000 Less: Investment in SS Corp. (198,000 )
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Book value of assets of TT Corp. P 646,000 Book value of assets of SS Corp. 405,00 0 Total book value P1,051,00 0 Payment in excess of book value (P198,000 - P140,000) 58,000 Total assets reported P1,109,00 0 6 1. c P701,50 0 = (P61,500 + P95,000 + P280,000) + (P28,000 + P37,000 +P200,000) 6 2. d P257,50 0 = The amount reported by TT Corporation 6 3. a P407,50 0 = The amount reported by TT Corporation 64. c Par value of shares outstanding before issuance P200,000 Par value of shares outstanding after issuance 250,000 Par value of additional shares issued P 50,000 Divided by: No. of shares issued* __12,500 Par value of common stock P 4 *Paid-in capital before issuance (P200,000 + P350,000) P 550,000 Paid-in capital after issuance (P250,000 + P550,00)800,000 Paid-in capital of share issued at the time of exchangeP250,000 Divided by: Fair value per share of stockP 20 Shares issued 12,500 65. a Consideration transferred: Shares – 12,500 shares P250,000 Less: Goodwill 56,000 Fair value of identifiable net assets acquiredP194,000 66. a – Blue Town:
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Stockholders’ equity before issuance of shares (P700,000 + P980,000) P1,680,000 Issued shares: 34,000 shares x P35 1,190,000 Consolidated SHE/Net Assets P2,870,000 67. d 68. c Common stock combined…………………………………………………………P 160,000 Common – Acquirer Zyxel…………………………………..
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