If CARDO Co purchases the net assets of SYANO Co by issuing 4,000 shares of their P10 par value shares with a fair value of P35 per share, a P40,000 direct cost and a P50,000 stock issue cost however remain unpaid. The companies also agreed on the following:  CARDO guarantees the prices of there stocks and promises to pay the peso decline in their shares within one year.  CARDO Co promises to pay the stockholders of SYANO Co an additional P100,00 if the net income of the company in the next year will be more than P500,000. CARDO estimates that there is an 80% probability of achieving the target income.Compute for thetotal assets at the date of acquisition The following balances were taken from the trial balance of CARDO Company and SYANO Company at thestart of the fiscal year 20x7:CARDO COMPANYBook ValueFair ValueBook ValueFair ValueCashAccounts ReceivableAccounts PayableP450,000200,000P500,000250,000155,000600,000P500,000240,000 Mortgage Payable200,000 Ordinary Shares520,000 Retained EarningsP440,000220,000LO595,000260,000InventoryFixed Assets (Net)SYANO COMPANYBook ValueFair ValueBook ValueFair ValueAccounts PayableP350,000200,000250,000175,000P340,000220,000CashP300,000150,000125,000400,000P300,000160,000 Mortgage Payable100,000 Ordinary Shares420,000 Retained EarningsAccounts ReceivableInventoryFixed Assets (Net)RS

Computation of the total assets at the date of acquisition:

Answered: If CARDO Co purchases the net assets of…

Managerial Accounting: The Cornerstone of Business Decision-Making

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Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 30BEB: Klynveld Companys balance sheet shows total liabilities of 94,000,000, total stockholders equity of...

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If CARDO Co purchases the net assets of SYANO Co by issuing 4,000 shares of their P10 par value shares with a fair value of P35 per share, a P40,000 direct cost and a P50,000 stock issue cost however remain unpaid. The companies also agreed on the following:  CARDO guarantees the prices of there stocks and promises to pay the peso decline in their shares within one year.  CARDO Co promises to pay the stockholders of SYANO Co an additional P100,00 if the net income of the company in the next year will be more than P500,000. CARDO estimates that there is an 80% probability of achieving the target income.

Compute for thetotal assets at the date of acquisition

The following balances were taken from the trial balance of CARDO Company and SYANO Company at the
start of the fiscal year 20x7:
CARDO COMPANY
Book Value
Fair Value
Book Value
Fair Value
Cash
Accounts Receivable
Accounts Payable
P450,000
200,000
P500,000
250,000
155,000
600,000
P500,000
240,000 Mortgage Payable
200,000 Ordinary Shares
520,000 Retained Earnings
P440,000
220,000
LO
595,000
260,000
Inventory
Fixed Assets (Net)
SYANO COMPANY
Book Value
Fair Value
Book Value
Fair Value
Accounts Payable
P350,000
200,000
250,000
175,000
P340,000
220,000
Cash
P300,000
150,000
125,000
400,000
P300,000
160,000 Mortgage Payable
100,000 Ordinary Shares
420,000 Retained Earnings
Accounts Receivable
Inventory
Fixed Assets (Net)
RS

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