How much is the goodwill or income on january

Reference no: EM132825633

On January 1, 2016, RAMPAGE Corporation and RUMMAGE Company decided to enter into a business combination. RAMPAGE Corporation's book shows assets and liabilities amounting to P1,350,000 and P300,000, respectively. The shareholders' equity is composed of P300,000 common stocks (P10 par); P150,000 APIC and P600,000 Retained Earnings. The book value asset of RAMPAGE is understated by P150,000 while its liability is overstated by P75,000.

RUMMAGE Company's assets inclusive of P15,000 goodwill amounted to P500,000 while its liabilities amounted to P150,000. The shareholders' equity is composed of P120,000 common stocks (P10 par); P105,000 APIC and P125,000 retained earnings. The fair value assets without goodwill and liabilities should be reduced both by P75,000.

RAMPAGE Company acquired the net assets of RUMMAGE Company by issuing 25,000 shares and cash of P10,000. Moreover, a contingent consideration of P80,000 will be paid when the result of the pending litigation existing at the date of acquisition on the quieting of title of the land of RUMMAGE is affirmative. The determinable amount of the said contingent consideration at the date of combination amounted to P50,000. The current market price of RAMPAGE stock is traded at P12 per share.

RAMPAGE Corporation paid the following as a result of business combination:

Finder's Fee P50,000
Legal, Accounting and Other Consulting Fees P50,000
Cost of Stockholder's meeting to vote for the acquisition P20,000
SEC Registration of the business combination P15,000
General Administrative Cost P15,000
Cost of printing stock certificates P10,000
Accountant's fee related to the stock issuance P20,000
SEC registration of new shares issued P40,000

Question 1: How much is the goodwill or income on January 1, 2016? (Put in parenthesis if your answer is income)

Question 2: How much is the combined APIC?

Question 3: How much is the Combined Retained Earnings?

Question 4: How much is the Combined Total Liabilities?

Reference no: EM132825633

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