STI Co. acquired 55% of the outstanding shares of UE Inc on August 1, 2021 at a total cost of P5,005,000. At acquisition date, UE's ordinary shares and retained earnings amounted to P200,000 and P4,800,000. All assets and liabilities fair values equal to their book values except for the patent which had a fair value of P1,800,000 and a book value of P400,000. The patents have a remaining life of 5 years. For 2021, UE had the following earnings and dividends: Net Income Jan - July = 500,000 Aug - Dec = 1,100,000 Dividends Paid Jan - July = 1,100,000 Aug - Dec = 1,200,000 %3D
STI Co. acquired 55% of the outstanding shares of UE Inc on August 1, 2021 at a total cost of P5,005,000. At acquisition date, UE's ordinary shares and retained earnings amounted to P200,000 and P4,800,000. All assets and liabilities fair values equal to their book values except for the patent which had a fair value of P1,800,000 and a book value of P400,000. The patents have a remaining life of 5 years. For 2021, UE had the following earnings and dividends: Net Income Jan - July = 500,000 Aug - Dec = 1,100,000 Dividends Paid Jan - July = 1,100,000 Aug - Dec = 1,200,000 %3D
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 30E
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