Subsidiary Company was merged with Parent Corporation on December 31, 2021. In the business combination, Parent Corporation issued 40,000 shares of its P100 par value ordinary shares, with market price of P127 per share. Fair market value agrees with book values, except for Land which has a market value higher by P250,000. Additional cash payments were made by Parent Corporation in completing the combination, P25,000 for stock issue costs and P20,000 for direct costs. The stockholders' equity section of each company's balance sheet before the combination was: Parent Corporation Subsidiary Company Ordinary Shares 8,450,000 5,360,000 Additional Paid-In Capital 3,700,000 1,850,000 Retained Earnings 4,080,000 (1,670,000) Total 16,230,000 5,540,000 The retained earnings immediately after the combination is:
Subsidiary Company was merged with Parent Corporation on December 31, 2021. In the business combination, Parent Corporation issued 40,000 shares of its P100 par value ordinary shares, with market price of P127 per share. Fair market value agrees with book values, except for Land which has a market value higher by P250,000. Additional cash payments were made by Parent Corporation in completing the combination, P25,000 for stock issue costs and P20,000 for direct costs. The stockholders' equity section of each company's balance sheet before the combination was: Parent Corporation Subsidiary Company Ordinary Shares 8,450,000 5,360,000 Additional Paid-In Capital 3,700,000 1,850,000 Retained Earnings 4,080,000 (1,670,000) Total 16,230,000 5,540,000 The retained earnings immediately after the combination is:
Chapter6: Corporations: Redemptions And Liquidations
Section: Chapter Questions
Problem 64P
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Transcribed Image Text:Subsidiary Company was merged with Parent Corporation on December
31, 2021. In the business combination, Parent Corporation issued
40,000 shares of its P100 par value ordinary shares, with market price of
P127 per share. Fair market value agrees with book values, except for
Land which has a market value higher by P250,000. Additional cash
payments were made by Parent Corporation in completing the
combination, P25,000 for stock issue costs and P20,000 for direct costs.
The stockholders' equity section of each company's balance sheet before
the combination was:
Parent Corporation Subsidiary Company
Ordinary Shares
8,450,000
5,360,000
Additional Paid-In Capital
3,700,000
1,850,000
Retained Earnings
4,080,000
(1,670,000)
Total
16,230,000
5,540,000
The retained earnings immediately after the combination is:
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