Peterpan Company issued 96,000 shares of its P25 par common stock for the net assets of Tinkerbell Corp. in business combination completed on March 1, 2020. The Acquiree’s net assets are worth P3,040,000 at fair market value. Out of pocket costs of the combination were as follows: Finder’s fee20,800Contingent consideration (probable and measurable) 14,400Legal fee21,600Printing of stock certificates6,800Professional fees paid to a CPA16,800Fees paid to company lawyers18,760Fees paid to company accountants31,120The goodwill from the business combination is P334,400.How much is the fair market value of shares of Peterpan Company at March 1, 2020?A. 35B. 40C. 30D. 25

Total fair market value of assets acquired = net assets + Goodwill - Contingent consideration =…

Answered: Peterpan Company issued 96,000 shares…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 23E

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Peterpan Company issued 96,000 shares of its P25 par common stock for the net assets of Tinkerbell Corp. in business combination completed on March 1, 2020. The Acquiree’s net assets are worth P3,040,000 at fair market value. Out of pocket costs of the combination were as follows:

Finder’s fee	20,800
Contingent consideration (probable and measurable)	14,400
Legal fee	21,600
Printing of stock certificates	6,800
Professional fees paid to a CPA	16,800
Fees paid to company lawyers	18,760
Fees paid to company accountants	31,120