Reference no: EM132927051
Questions -
BEA Co. merged into PIA Co. on June 30, 2023. In exchange for the net assets at fair market value of BEA Co. amounting to P2,785,800, PIA issued 68,000 common shares at P36 par value, then going at a market price of P41 per share. Out of pocket costs of the combination were as follows (all amounts are in Philippine Peso):
Legal fees for the contract of business combination 174,700
Audit fee for SEC registration of stock issue 198,400
Printing cost of stock certificates 144,900
Broker's fee 135,000 Ø Accountant's fee for pre-acquisition audit 161,000
Other direct cost of acquisition 90,400
General and allocated expenses 115,300
Listing fees in issuing new shares 172,000
What is the amount of expense to be recognized in the statement of comprehensive income for the year ended December 31, 2023?
a. P765,400
b. P851,700
c. P1,191,700
d. P676,400
On September 18, 2019, JR Co. acquired all of JM Inc.'s P2,000,000 identifiable assets and P500,000 liabilities. Book values of the JM's assets and liabilities equal to their fair values except for the overvalued plant and equipment. As a consideration, JR issued its own shares of stock with a market value of P1,600,000. The merger resulted into P700,000 goodwill. Assuming JR had P5,000,000 total assets prior to the combination. How much is the combined total assets?
a. P6,400,000
b. P6,600,000
c. P7,100,000
d. P7,000,000
On February 28, 2023, MER Company merged with Ger Company. MER exchanged three of its ordinary shares for each share of GER's ordinary shares. The fair value of MER's ordinary shares was P10/share. Total consideration transferred by MER company Amounted to P900,000. Acquisition cost paid by MER related to the business combination amounted to P30,000.
The Statement of financial position accounts prior to the merger are presented below:
MER Co. GER Co.
Book Value FMV
Current Assets 120,000 80,000 110,000
Plant Assets 450,000 360,000 820,000
Goodwill 90,000 20,000
Current Liabilities 105,000 50,000 50,000
Notes Payable 120,000
Bonds Payable 300,000 280,000
Ordinary Shares (P1) 150,000 (P5) 225,000
Retained Earnings 210,000 (40,000)
1. How much is the total assets in the statement of financial position of MER Company after the business combination?
a. P1,590,000
b. P1,890,000
c. P1,560,000
d. P1,860,000
2. What is the amount of goodwill after the merger?
a. Some other amount
b. P90,000
c. P390,000
d. P300,000