Teacher Inc. will issue share of P25-par ordinary share for the net assets of Student Co. Teacher Inc. ordinary share has a current market value of P50 per share. The balance sheet accounts of Student Co. are as follows: Current assets 400,000 Ordinary shares 100,000 PPE 900,000 Share premium 320,000 Retained Liabilities 500,000 380,000 earnings Student Co. current assets and PPE are appraised at P600,000 and P1,200,000 respectively. Accordingly, Teacher Inc. issued ordinary shares with the total market value equal to that of Student Co. net assets. To recognize a goodwill of P400,000, how many shares were issued?
Teacher Inc. will issue share of P25-par ordinary share for the net assets of Student Co. Teacher Inc. ordinary share has a current market value of P50 per share. The balance sheet accounts of Student Co. are as follows: Current assets 400,000 Ordinary shares 100,000 PPE 900,000 Share premium 320,000 Retained Liabilities 500,000 380,000 earnings Student Co. current assets and PPE are appraised at P600,000 and P1,200,000 respectively. Accordingly, Teacher Inc. issued ordinary shares with the total market value equal to that of Student Co. net assets. To recognize a goodwill of P400,000, how many shares were issued?
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
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 1MC
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