If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition:REQUIREMENTS:A. GoodwillB. Consolidated Total Assets at the date of acquisitionC. Consolidated Total Liabilities at the date of acquisitionD. Consolidated Equity at the date of acquisition PIENTIAEDIFIPROMDI CO.Fair ValueP1,440,000920,000Book ValueFair ValueBook ValueP1,500,000 Accounts Payable740,000 Mortgage Payable340,000 Ordinary Shares1,520,000 Retained EarningsCashP1,500,000750,000355,0001,600,000P1,450,000900,000600,0001,255,000Accounts ReceivableInventoryFixed Assets (Net)CARDO28SYANO25PROMDIFair value of shares30Direct costsIndirect costsStock issue costs50,00035,000155,00040,00045,00050,000

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Answered: If PROMDI Co., a new company would…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition:

REQUIREMENTS:
A. Goodwill
B. Consolidated Total Assets at the date of acquisition
C. Consolidated Total Liabilities at the date of acquisition
D. Consolidated Equity at the date of acquisition

PIENTIAEDIFI
PROMDI CO.
Fair Value
P1,440,000
920,000
Book Value
Fair Value
Book Value
P1,500,000 Accounts Payable
740,000 Mortgage Payable
340,000 Ordinary Shares
1,520,000 Retained Earnings
Cash
P1,500,000
750,000
355,000
1,600,000
P1,450,000
900,000
600,000
1,255,000
Accounts Receivable
Inventory
Fixed Assets (Net)
CARDO
28
SYANO
25
PROMDI
Fair value of shares
30
Direct costs
Indirect costs
Stock issue costs
50,000
35,000
155,000
40,000
45,000
50,000

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