SB Corp. is offered 200,000 shares of EX Corp. ordinary shares in exchange for its net assets at August 30, 2020. The acquirer shares had a market value of P11 per share on that date. The balance sheet of the two companies at the date of acquisition follow: SB CORP EX CORP Total assets 1,097,500 1,733,250 Liabilities 1,097,500 383,250 Ordinary shares, par P1 800,000 25,000 Retained earnings (deficit) (15,000) 1,325,000 Total liabilities and stockholders’ equity 1,097,500 1,733,250 The goodwill (income from acquisition) resulting from the business combination would be A. 550,000 B. 850,000 C. (175,000) D. 650,000
SB Corp. is offered 200,000 shares of EX Corp. ordinary shares in exchange for its net assets at August 30, 2020. The acquirer shares had a market value of P11 per share on that date. The balance sheet of the two companies at the date of acquisition follow:
|
|
SB CORP |
EX CORP |
|
Total assets |
1,097,500 |
1,733,250 |
|
Liabilities |
1,097,500 |
383,250 |
|
Ordinary shares, par P1 |
800,000 |
25,000 |
|
|
(15,000) |
1,325,000 |
|
Total liabilities and |
1,097,500 |
1,733,250 |
The
A. 550,000
B. 850,000
C. (175,000)
D. 650,000
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