Reference no: EM132635155
Question - On January 1, 2011, Sandara Corporation and Monary Company have entered into a business combination agreement under which Sandara will issue 8,000 shares of its P10 par value ordinary share capital to acquire all the identifiable net assets of Monary Company. Just prior to the business combination, the individual statements of financial position of Sandara and Monary showing the carrying value and their fair value are as follows:
Sandara Corporation Monary Corporation
Statement of Financial Position Item Book Value Fair Value Book Value Fair Value
Cash and Receivables P150,000 P150,000 P 40,000 P 40,000
Land 100,000 170,000 50,000 85,000
Plant Assets (net) 300,000 400,000 160,000 230,000
Total Assets P550,000 P720,000 P250,000 P355,000
Ordinary Share Capital P200,000 P100,000
Share Premium 20,000 10,000
Accumulated Profits 330,000 140,000
Total Equities P550,000 P250,000
As of acquisition date, Sandara shares currently are trading at P50 and Sheila P5 par value shares are trading at P18 each.
Required - Determine the amount to be reported immediately following the business combination for each of the following items in the consolidated statement of financial position.
1. Cash and Receivables
2. Land
3. Plant Assets (net)
4. Goodwill
5. Ordinary Share Capital
6. Share Premium
7. Accumulated Profits