Parent Company issued 50,000 shares of P100 par ordinary share for all outstanding shares of Subsidiary Company in a business combination consummated in July 1, 2020. Parent Company's ordinary shares was selling at P102 per share at the time of the consummation of the combination. Subsidiary Company's net asset on the date of acquisition has a carrying amount of P3,800,000. Out of pocket expenses of the combination were as follows: Legal fees 50,000 Finder's fees 25,000 CPA audit fees 50,000 Printing of stock certificates 65,000

Parent Company issued 50,000 shares of P100 par ordinary share for all outstanding shares of Subsidiary Company in a business combination consummated in July 1, 2020. Parent Company's ordinary shares was selling at P102 per share at the time of the consummation of the combination. Subsidiary Company's net asset on the date of acquisition has a carrying amount of P3,800,000. Out of pocket expenses of the combination were as follows: Legal fees 50,000 Finder's fees 25,000 CPA audit fees 50,000 Printing of stock certificates 65,000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 24E

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Parent Company issued 50,000 shares of P100 par ordinary share for all outstanding shares of Subsidiary Company in a business combination consummated in July 1, 2020. Parent Company’s ordinary shares was selling at P102 per share at the time of the consummation of the combination. Subsidiary Company’s net asset on the date of acquisition has a carrying amount of P3,800,000. Out of pocket expenses of the combination were as follows:Legal fees 50,000Finder’s fees 25,000CPA audit fees 50,000Printing of stock certificates 65,000 Determine the amount charged to expense:
Ugly Corp. issued 50,000 shares of P100 par ordinary share for all outstanding shares of Dolls Company in a business combination consummated in July 1, 2019. Ugly’s ordinary shares was selling at P102 per share at the time of the consummation of the combination. Dolls’ net asset on the date of acquisition has a carrying amount of P3,800,000. Out of pocket expenses of the combination were as follows:Legal fees P50,000Finder’s fees 25,000CPA audit fees 50,000Printing of stock certificates 65,000Determine the amount charged to expense:
Pauline Company acquired 4,000 shares of the outstanding stock of Sophia Company for P1,200,000 on January 1, 2020. Pauline Company also paid P100,000 direct costs related to the combination. On this date, the stockholders equity of Sophia Company consisted of Capital Stock of P500,000, P100 par and Retained Earnings of P600,000. The carrying values of Sophia Company identifiable assets and liabilities are equal to their fair market values. NCI is measured at its proportionate share.On the same date, Pauline Company sold equipment costing P100,000 with accumulated depreciation of P60,000 to Sophia Company for P120,000. Pauline Company was depreciating the equipment for 10 years with no salvage value using the straight-line method and Sophia Company continued the same method. At the end of the year, Pauline Company reported net income of P300,000 and paid dividends of P250,000 while Sophia Company reported net income of P200,000 and paid dividends of P10 per share.The consolidated net…
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