Pls answer and provide solution and explanation. Thank youuu 10. Red Corporation will issue ordinary shares with a par value P10 for the net assets of BlueCompany. Red's ordinary share has a current market value of P40 per share. Blue'sstatement of financial position on the date of acquisition follow:Current assetsProperty and equipment luLiabilitiesP320,000Common stock, PS parP80,000880,000 Additional paid in capital 320,000400,000400,000 Retained earningsBlue's current assets are appraised at P400,000 and the property and equipment were appraised atP1,600,000, Its liabilities are fairly valued. Accordingly, Red Corporation issued shares of itscommon stock with a total market value equal to that of Blue's net assets including goodwill.CHAPTER 1: BUSINESS COMBINATIONPage | 46To recognize goodwill of P200,000, how many shares were to be issued by Red?a. 55,000 sharesb. 45,000 sharesc. 40,000 sharesd. 50,000 shares11. On May 31,2020, Genesis Company has assets and liabilities with the following fair values:Current Assets - P180,000; Non-Current Assets - P220,000; Liabilities – P40,000.On June 1, 2020, Judges Corporation purchased the net assets of Genesis for P310,000cash. In the books of Judges, the acquisition resulted to:a. Gain recognized in the P/L amounting to P50,000b. Goodwill recognized in the balance sheet amounting to 50,000c. Gain recognized in the OCI amounting to P50,000d. Decrease in current assets of P50,000

10. Red Corporation will issue ordinary shares with a par value P10 for the net assets of Blue Company. Red's ordinary share has a current market value of P40 per share. Blue's statement of financial position on the date of acquisition follow: P320,000 Current assets Property and equipment Liabilities Common stock, P5 par P80,000 880,000 Additional paid in capital 320,000 400,000 400,000 Retained eamings Blue's current assets are appraised at P400,000 and the property and equipment were appraised at P1,600,000. Its liabilities are fairly valued. Accordingly, Red Corporation issued shares of its common stock with a total market value cqual to that of Blue's net assets including goodwill. CHAPTER 1: BUSINESS COMBINATION Page| To recognize goodwill of P200,000, how many shares were to be issued by Red? a 55,000 shares b. 45,000 shares c. 40,000 shares d. 50,000 shares

10. Red Corporation will issue ordinary shares with a par value P10 for the net assets of Blue Company. Red's ordinary share has a current market value of P40 per share. Blue's statement of financial position on the date of acquisition follow: P320,000 Current assets Property and equipment Liabilities Common stock, P5 par P80,000 880,000 Additional paid in capital 320,000 400,000 400,000 Retained eamings Blue's current assets are appraised at P400,000 and the property and equipment were appraised at P1,600,000. Its liabilities are fairly valued. Accordingly, Red Corporation issued shares of its common stock with a total market value cqual to that of Blue's net assets including goodwill. CHAPTER 1: BUSINESS COMBINATION Page| To recognize goodwill of P200,000, how many shares were to be issued by Red? a 55,000 shares b. 45,000 shares c. 40,000 shares d. 50,000 shares

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

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 1MC

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