Reference no: EM133110541

Question 1 - ABC Co. owns a branch. At the end of the month, the balance of the Allowance on overvaluation is P95,000. The branch reported the following: beg. inventories - P15,000; ending inventories - P100,000; shipments from Home Office P555,000; Sales P800,000; Expenses - P200,000. What is the percentage of profit on cost that the Home office uses to bill the branch?

Question 2 - 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 combination?

Question 3 - Using the same information in #2 what amount will be reported for Shareholders' Equity in the combined company's statement of financial position immediately following the business combination?