Please refer to the picture below for information. Instructions: Show the complete solutionQuestion:1. Prepare the Statement of Financial Position (SFP) of Tanangonan after the merger.2. Determine the goodwill or gain on bargain purchase from the above acquisition. 1. On January 1, 20X2, Tanangonan Company acquired all the assets and assumed all the liabilities of OngCompany. In exchange for the net assets of Ong, Tanangonan gave its bond payable with a maturity valueof P600,000 with a stated rate of 10% interest payable semiannually on June 30 and December 31. Thesaid bond will also mature on January 1, 20X2, and has a yield rate of 12%.The Statement of Financial Position (SFP) of both companies as of January 1, 20X2 were as follows:TanangonanBook ValueÔngBook ValueFair ValueCashP250,000352,700848,300700,000950,000(325,000)262,750(70,050)P2,968,700P114,000150,000232,000P114,000135,000310,000315,00054,900ReceivablesInventoriesLandBuildingsAccumulated Depreciation – BuildingsEquipmentAccumulated Dep100,000410,000(170,500)136,450(90,450)P881,50039,450ion – EquipmentTotal AssetsP968,350P95,300300,000Current LiabilitiesP292,700P95,300260,000Bond PayableCommon Stock, P15 par valueCommon Stock, P5 par valueOther Contributed CapitalRetained EarningsTotal Equities1,200,000950,000526,000P2,968,750236,500170,00079,700P881,500

Merger: Merger can be defined as the agreement between two companies that lead to creation of a new…

Answered: 1. Prepare the Statement of Financial…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1RE

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Instructions: Show the complete solution

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1. Prepare the Statement of Financial Position (SFP) of Tanangonan after the merger.

2. Determine the goodwill or gain on bargain purchase from the above acquisition.

1. On January 1, 20X2, Tanangonan Company acquired all the assets and assumed all the liabilities of Ong
Company. In exchange for the net assets of Ong, Tanangonan gave its bond payable with a maturity value
of P600,000 with a stated rate of 10% interest payable semiannually on June 30 and December 31. The
said bond will also mature on January 1, 20X2, and has a yield rate of 12%.
The Statement of Financial Position (SFP) of both companies as of January 1, 20X2 were as follows:
Tanangonan
Book Value
Ông
Book Value
Fair Value
Cash
P250,000
352,700
848,300
700,000
950,000
(325,000)
262,750
(70,050)
P2,968,700
P114,000
150,000
232,000
P114,000
135,000
310,000
315,000
54,900
Receivables
Inventories
Land
Buildings
Accumulated Depreciation – Buildings
Equipment
Accumulated Dep
100,000
410,000
(170,500)
136,450
(90,450)
P881,500
39,450
ion – Equipment
Total Assets
P968,350
P95,300
300,000
Current Liabilities
P292,700
P95,300
260,000
Bond Payable
Common Stock, P15 par value
Common Stock, P5 par value
Other Contributed Capital
Retained Earnings
Total Equities
1,200,000
950,000
526,000
P2,968,750
236,500
170,000
79,700
P881,500

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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