If ABC Co purchases the net assets of XYZ Co by issuing 50,000 shares of their P20 par value ordinary shares with a fair value of P30 per share and paying professional fees to arrange the acquisition amounting to P20,000; legal fees of P30,000; costs for maintaining the acquisition of the department, P30,000; cost of registering the securities, P25,000 and cost of issuing the securities, P15,000. Parent also determines contingent consideration to be paid in the future amounting to P100,000 on the date of acquisition but could go as high as P150,000. From the data, determine the total amount of share premium to be reported by ABC Co after the acquisition.
If ABC Co purchases the net assets of XYZ Co by issuing 50,000 shares of their P20 par value ordinary shares with a fair value of P30 per share and paying professional fees to arrange the acquisition amounting to P20,000; legal fees of P30,000; costs for maintaining the acquisition of the department, P30,000; cost of registering the securities, P25,000 and cost of issuing the securities, P15,000. Parent also determines contingent consideration to be paid in the future amounting to P100,000 on the date of acquisition but could go as high as P150,000. From the data, determine the total amount of share premium to be reported by ABC Co after the acquisition.
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter8: Investing Activities
Section: Chapter Questions
Problem 22PC
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If ABC Co purchases the net assets of XYZ Co by issuing 50,000 shares of their P20 par value ordinary shares with a fair value of P30 per share and paying professional fees to arrange the acquisition amounting to P20,000; legal fees of P30,000; costs for maintaining the acquisition of the department, P30,000; cost of registering the securities, P25,000 and cost of issuing the securities, P15,000. Parent also determines contingent consideration to be paid in the future amounting to P100,000 on the date of acquisition but could go as high as P150,000. From the data, determine the total amount of share premium to be reported by ABC Co after the acquisition.
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