ABC Company and XYZ Company have announced terms of an exchange agreement under which ABC will issue 10,000 shares of its P5 par value ordinary shares to acquire all of XYZ’s assets. ABC’s shares are trading at P28, and XYZ’s P10 par value shares are trading at P15. Historical cost and fair value statement of financial position data on January 1, 2021, are as follows: (see image below) Based on the information provided, what amount will be reported for Ordinary Share in the combined company’s statement of financial position immediately following the business combinatio
ABC Company and XYZ Company have announced terms of an exchange agreement under which ABC will issue 10,000 shares of its P5 par value ordinary shares to acquire all of XYZ’s assets. ABC’s shares are trading at P28, and XYZ’s P10 par value shares are trading at P15. Historical cost and fair value statement of financial position data on January 1, 2021, are as follows: (see image below) Based on the information provided, what amount will be reported for Ordinary Share in the combined company’s statement of financial position immediately following the business combinatio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC Company and XYZ Company have announced terms of an exchange agreement under which ABC will issue 10,000 shares of its P5 par value ordinary shares to acquire all of XYZ’s assets. ABC’s shares are trading at P28, and XYZ’s P10 par value shares are trading at P15. Historical cost and fair value
![ABC Company
Fair Value
P 125,000
120,000
220,000
XYZ Company
Book Value
Book Value
Fair Value
P 125,000
75,000
180,000
P 25,000
30,000
120,000
Cash
40,000
50,000
150,000
Land
Buildings and Equipment (net)
Total Assets
P 380,000
P 175,000
P 150,000
60,000
Ordinary Shares
P 100,000
20,000
55,000
P 175,000
Share Premium
Accumulated Profits
Total
170,000
P 380,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe1e9ffc1-fe3c-48a8-afe0-b3d411a9fb9b%2Ff09e23b9-57d9-41c9-901d-dccf585cb6bd%2F6e8b9xt4_processed.png&w=3840&q=75)
Transcribed Image Text:ABC Company
Fair Value
P 125,000
120,000
220,000
XYZ Company
Book Value
Book Value
Fair Value
P 125,000
75,000
180,000
P 25,000
30,000
120,000
Cash
40,000
50,000
150,000
Land
Buildings and Equipment (net)
Total Assets
P 380,000
P 175,000
P 150,000
60,000
Ordinary Shares
P 100,000
20,000
55,000
P 175,000
Share Premium
Accumulated Profits
Total
170,000
P 380,000
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