Fair value of stock issued 144000 P15 P2160000 Problem VI Case A Consideration

Fair value of stock issued 144000 p15 p2160000

This preview shows page 12 - 18 out of 48 pages.

Fair value of stock issued (144,000 ´ P15) = P2,160,000 Problem VI Case A Consideration transferred P130,000 Less: Fair Value of Net Assets 120 ,000 Goodwill P 10,000
Image of page 12

Subscribe to view the full document.

Case B Consideration transferred P110,000 Less: Fair Value of Net Assets 90 ,000 Goodwill P 20,000 Case C Consideration transferred P15,000 Less: Fair Value of Net Assets 20 ,000 Gain (P 5,000) Assets Liabilitie s Retained Earnings (Gain) Goodwill Current Assets Long-Lived Assets Case A P10,000 P20,000 P130,000 P30,000 0 Case B 20,000 30,000 80,000 20,000 0 Case C 0 20,000 40,000 40,000 5,000 Problem VII Present value of maturity value, 20 periods @ 6%: 0.3118 x P600,000 = P187,080 Present value of interest annuity, 20 periods @ 6%: 11.46992 x 30,000 = 344,098 Total Present value P531,178 Par value 600 ,000 Discount on bonds payable P 68 ,822 Cash 114,00 0 Accounts Receivable 135,00 0 Inventory 310,00 0
Image of page 13
Land 315,00 0 Buildings 54,900 Equipment 39,450 Bond Discount (P40,000 + P68,822) 108,82 2 Current Liabilities 95,300 Bonds Payable (P300,000 + P600,000) 900,00 0 Gain on Acquisition of Stalton (ordinary) 81,872 Computation of Excess of Net Assets Received Over Cost Consideration transferred (P531,178 plus liabilities assumed of P95,300 andP260,000) P886,478 Less: Total fair value of assets received _968 ,350 Excess of fair value of net assets over cost (P 81 ,872 ) Problem VIII Acquisition Method—Entry to record acquisition of Sampras Consideration transferred P300,000 Estimated Liability for contingent Consideration 15,000 Consideration transferred (fair value) 315,000 Fair value of net identifiable assets 282,000 Goodwill P33,000 Receivables 80,000 Inventory 70,000 Buildings 115,000 Equipment 25,000 Customer list 22,000 IPRD 30,000 Goodwill 33,000 Current liabilities 10,000 Long-term liabilities 50,000 Estimated liability for contingent consideration 15,000
Image of page 14

Subscribe to view the full document.

Cash 300,000 Acquisition related-expenses 10,000 Cash 10,000 Problem IX 1. a. The computation of goodwill is as follows: Consideration transferred; Common shares: 30,000 shares x P25 P 750,000 Notes payable 180,000 Contingent consideration (cash contingency): P120,000 x 30% probability 36,0 00 Total P 966,000 Less: Fair value of identifiable assets acquired and liabilities assumed: Cash P 24,000 Receivables – net 48,000 Inventories 72,000 Land 240,000 Buildings – net 360,000 Equipment – net 300,000 In-process research and development 60,000 Accounts payable ( 72,00 0) Other liabilities ( 168,00 0) 864,0 00 Positive Excess – Goodwill P 102,000
Image of page 15
b. The journal entries by Peter Corporation to record the acquisition is as follows: Cash 24,000 Receivables – net 48,000 Inventories 72,000 Land 240,000 Buildings – net 360,000 Equipment – net 300,000 In-process research and development 60,000 Goodwill 102,000 Accounts payable 62,000 Other liabilities 168,000 Notes payable 180,000 Estimated Liability for Contingent Consideration 36,000 Common stock (P10 par x 30,000 shares) 300,000 Paid-in capital in excess of par [(P25 – P10) x 30,000 shares] 450,000 Acquisition of Saul Company. Acquisition-related expenses 78,000 Cash 78,000 Acquisition related costs – direct costs. Paid-in capital in excess of par 32,400 Cash 32,400 Acquisition related costs – costs to issue and register stocks. Acquisition-related expenses 27,600 Cash 27,600 Acquisition related costs – indirect costs.
Image of page 16

Subscribe to view the full document.

c. The balance sheet of Pure Corporation immediately after the acquisition is as follows: Pure Corporation Balance Sheet December 31, 20x4 Assets Cash P 162,000 Receivables – net 144,000 Inventories 360,000 Land 348,000 Buildings – net 840,000 Equipment – net 732,000 In-process research and development 60,000 Goodwill 102,00 0 Total Assets P2,748,00 0 Liabilities and Stockholders’ Equity Liabilities
Image of page 17
Image of page 18
  • Spring '16

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes