5 WAG PAPALOKO Inc. has the following balance sheet on January 1, 2018, which is the date of acquisition: Assets Liabilities and Equity Accounts Receivable 79,000 Current Liabilities 145,000 Inventory 112,000 Long-term notes 100,000 Other current assets 55,000 Ordinary share, P1 par 50,000 Equipment (net) 294,000 Share premium 200,000 Goodwill 30,000 Retained earnings 75,000 Total assets 570,000 Total liabilities and equity 570,000 On January 1, 2018, WAG PAPATINAG Corp. acquired the net assets of WAG PAPALOKO Inc. by issuing 7,000 shares of its P25 par value common stock. Subsequently, WAG PAPALOKO Inc. was liquidated and its assets and liabilities merged into WAG PAPATINAG Corp. WAG PAPATINAG Corp. and WAG PAPALOKO Inc. stocks were selling for P40 per share and P6 per share, respectively on January 1, 2018. The book values of WAG PAPALOKO Inc.’s identifiable assets and liabilities equaled their fair values except for the other current assets and equipment (net) of WAG PAPALOKO Inc. which has fair value of 50,000 and P320,000, respectively. In addition, WAG PAPATINAG Corp. incurred and paid P30,000 of legal and broker’s fees associated with the combination and P10,000 of stock issuance costs. What is the amount of increase in WAG PAPATINAG’s stockholder’s equity as a result of combination? Group of answer choices 306,000 276,000 280,000 240,000
5
WAG PAPALOKO Inc. has the following balance sheet on January 1, 2018, which is the date of acquisition:
|
Assets |
Liabilities and Equity |
|||
|
Accounts Receivable |
79,000 |
Current Liabilities |
145,000 |
|
|
Inventory |
112,000 |
Long-term notes |
100,000 |
|
|
Other current assets |
55,000 |
Ordinary share, P1 par |
50,000 |
|
|
Equipment (net) |
294,000 |
Share premium |
200,000 |
|
|
|
30,000 |
|
75,000 |
|
|
Total assets |
570,000 |
Total liabilities and equity |
570,000 |
On January 1, 2018, WAG PAPATINAG Corp. acquired the net assets of WAG PAPALOKO Inc. by issuing 7,000 shares of its P25 par value common stock. Subsequently, WAG PAPALOKO Inc. was liquidated and its assets and liabilities merged into WAG PAPATINAG Corp. WAG PAPATINAG Corp. and WAG PAPALOKO Inc. stocks were selling for P40 per share and P6 per share, respectively on January 1, 2018.
The book values of WAG PAPALOKO Inc.’s identifiable assets and liabilities equaled their fair values except for the other current assets and equipment (net) of WAG PAPALOKO Inc. which has fair value of 50,000 and P320,000, respectively.
In addition, WAG PAPATINAG Corp. incurred and paid P30,000 of legal and broker’s fees associated with the combination and P10,000 of stock issuance costs.
What is the amount of increase in WAG PAPATINAG’s
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