The following are the balances of BIG Company and GIRL Company as of January 1, 20x1.FairFairВookВookBIG COMPANYMarketMarketValueValueValueValueASSE TSLIABILITY AND EQUITY105,000 Accounts Payable470,000 Mortgage Payable300,000 Ordinary Share, 20 par 2,000,000Cash105,000300,000330,000Accounts Receivable550,0001,300,000 1,320,000InventoryProperty, Plant and Equipment, net220,0004,790,000 4,500,000 Share Premium?775,000?Goodwill100,000100,000 Retained Earnings1,390,000?FairВookFair MarketВookGIRL COMPANYMarketValueValueValueValueCash300,000300,000 Accounts Payable550,000500,000Accounts Receivable600,000470,000 Mortgage Payable300,000 Ordinary Share, 20 par2,500,000 2,480,000350,0008,910,000 10,000,000 Share PremiumInventory3,000,000?Property, Plant and Equipment, net2,760,000?Goodwill150,000100,000 Retained Earnings1,500,000The companies combined their resources and formed BIGGEST Co. Research and development with a fairmarket value of P120,000 was not included in the books of Big Company. An unrecorded interest payableworth P20,000 was also not included in the books of Girl Company. The new company issues 16,000 sharesof 500 par value common stocks with fair value of P550 and pays additional 1,500,000 and incurs a mortgageloan of P1,000,000. The company also paid a direct costs of 50,000 and indirect cost of 20,000. P15,000direct cost and P5,000 stock issue cost remain unpaid. Chan Co. also pay BIG and GIRL additional P100,000net income after 1 year if its net income exceed P3,000,000, there is a 90% chance of meeting the targetincome. Determine the total EQUITY of BIGGEST CO. immediately after the business combination.

A business combination occurs when an entity acquires control over an organization. Generally, the…

The following are the balances of BIIG Company and GIRL Company as of January 1, 20x1. Fair Fair Book Вook BIG COMPANY Market Market Value Value Value Value ASSE TS LIABILITY AND EQUITY Cash 105,000 105,000 Accounts Payable 470,000 Mortgage Payable 300,000 Ordinary Share, 20 par 2,000,000 300,000 330,000 Accounts Receivable 550,000 1,300,000 1,320,000 Inventory 220,000 Property, Plant and Equipment, net 4,790,000 4,500,000 Share Premium 775,000 ? Goodwill 100,000 100,000 Retained Earnings 1,390,000 ? Fair Book Fair Market Book GIRL COMPANY Market Value Value Value Value Cash 300,000 300,000 Accounts Payable 550,000 500,000 Accounts Receivable 600,000 470,000 Mortgage Payable 2,500,000 2,480,000 Inventory 350,000 300,000 Ordinary Share, 20 par 3,000,000 Property, Plant and Equipment, net Goodwill 8,910,000 10,000,000 Share Premium 2,760,000 ? 150,000 100,000 Retained Earnings 1,500,000 ? The companies combined their resources and formed BIGGEST Co. Research and development with a fair market value of P120,000 was not included in the books of Big Company. An unrecorded interest payable worth P20,000 was also not included in the books of Girl Company. The new company issues 16,000 shares of 500 par value common stocks with fair value of P550 and pays additional 1,500,000 and incurs a mortgage loan of P1,000,000. The company also paid a direct costs of 50,000 and indirect cost of 20,000. P15,000 direct cost and P5,000 stock issue cost remain unpaid. Chan Co. also pay BIG and GIRL additional P100,000 net income after 1 year if its net income exceed P3,000,000, there is a 90% chance of meeting the target income. Determine the total EQUITY of BIGGEST co. immediately after the business combination.

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 30BEB: Klynveld Companys balance sheet shows total liabilities of 94,000,000, total stockholders equity of...