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SD acquired the net assets of both GM and SR. Paying cash in the amount of P185,000 and by issuing 198,500 shares to GM. Paying cash in the amount of P 72,000 and by issuing 54,350 shares to SR. The par value of these shares is P35 per share and market value of P40 per share as of January 01, 2018. SD's retained earnings has a balance of P 10,750,000 on January 01, 2018 immediately before the acquisition. The following are the condensed balance sheet of GM and SR on January 01, 2018: GM SR Total Assets Liabilities Ordinary Shares Share premium Retained earnings P 10,250,000 P 2,775,000 P 3,100,000 P 1,250,000 P 3,125,000 P 3,057,500 P 800,000 P 1,295,000 P 100,000 P 862,500 SD Corp also incurred the following unpaid expenses: GM P 93,750 P 66,250 P 343,750 P 125,000 SR P 101,250 P 35,000 P 362,500 P 93,750 Indirect cost Finder’s fee Accounting and legal fees for SEC registration Printing cost of stock certificates

SD acquired the net assets of both GM and SR. Paying cash in the amount of P185,000 and by issuing 198,500 shares to GM. Paying cash in the amount of P 72,000 and by issuing 54,350 shares to SR. The par value of these shares is P35 per share and market value of P40 per share as of January 01, 2018. SD's retained earnings has a balance of P 10,750,000 on January 01, 2018 immediately before the acquisition. The following are the condensed balance sheet of GM and SR on January 01, 2018: GM SR Total Assets Liabilities Ordinary Shares Share premium Retained earnings P 10,250,000 P 2,775,000 P 3,100,000 P 1,250,000 P 3,125,000 P 3,057,500 P 800,000 P 1,295,000 P 100,000 P 862,500 SD Corp also incurred the following unpaid expenses: GM P 93,750 P 66,250 P 343,750 P 125,000 SR P 101,250 P 35,000 P 362,500 P 93,750 Indirect cost Finder’s fee Accounting and legal fees for SEC registration Printing cost of stock certificates

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 26E
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1. As a result of the merger, what is the goodwill?

  • 560,000
  • 638,500
  • 650,000
  • 11,500

2. what is the Retained Earnings after the merger?

  • 10,465,250
  • 10,269,250
  • 10,350,500
  • 10,280,750

3. what is the net increase or (decrease) in the stockholders' equity of SD Corp. after the merger?

  • P8,904,250
  • P8,709,250
  • (P7,604,250)
  • P7,604,250
SD acquired the net assets of both GM and SR. Paying cash in the amount of P185,000 and by issuing 198,500 shares to GM. Paying cash in the amount of P 72,000 and by issuing 54,350 shares to SR. The par value of these shares is P35 per share and market value of P40 per share as of January 01, 2018. SD's retained earnings has a balance of P 10,750,000 on January 01, 2018 immediately before the acquisition. The following are the condensed balance sheet of GM and SR on January 01, 2018: GM SR P 10,250,000 P 2,775,000 P 3,100,000 P 1,250,000 P 3,125,000 P 3,057,500 P 800,000 P 1,295,000 P 100,000 Total Assets Liabilities Ordinary Shares Share premium Retained earnings P 862,500 SD Corp also incurred the following unpaid expenses: GM SR P 93,750 P 66,250 P 343,750 P 125,000 P 101,250 P 35,000 P 362,500 P 93,750 Indirect cost Finder's fee Accounting and legal fees for SEC registration Printing cost of stock certificates
Transcribed Image Text:SD acquired the net assets of both GM and SR. Paying cash in the amount of P185,000 and by issuing 198,500 shares to GM. Paying cash in the amount of P 72,000 and by issuing 54,350 shares to SR. The par value of these shares is P35 per share and market value of P40 per share as of January 01, 2018. SD's retained earnings has a balance of P 10,750,000 on January 01, 2018 immediately before the acquisition. The following are the condensed balance sheet of GM and SR on January 01, 2018: GM SR P 10,250,000 P 2,775,000 P 3,100,000 P 1,250,000 P 3,125,000 P 3,057,500 P 800,000 P 1,295,000 P 100,000 Total Assets Liabilities Ordinary Shares Share premium Retained earnings P 862,500 SD Corp also incurred the following unpaid expenses: GM SR P 93,750 P 66,250 P 343,750 P 125,000 P 101,250 P 35,000 P 362,500 P 93,750 Indirect cost Finder's fee Accounting and legal fees for SEC registration Printing cost of stock certificates
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