Reference no: EM132714150

Question - Happy teacher's day for those CPA teachers out there! Good day, coaches. I will ask for a help today, please help me answer these problems, related to AFAR subject. Thank you so much to anyone who would try to help me.

1) Mask, a private limited company, has arranged for Man, a public limited company, to acquire it as a means of obtaining a stock exchange listing. Man issues 15 million shares to acquire the whole of the share capital of Mask (6 million shares). The fair value of the net assets of Mask and Man are P30 million and P 18 million respectively. The fair value of each of the shares of Mask is P6 and the quoted market price of Man's shares is P2. The share capital of Man is 25 million shares after the acquisition. Calculate the value of goodwill in the above acquisition.

2) Die, a private limited company, has acquired Coal, a private limited company, on January 1, 2015. The fair value of the purchase consideration was 10 million ordinary shares of P1 of Die, and the fair value of the net assets acquired was P 7 million. At the time of the acquisition, the value of the ordinary shares of Die and the net assets of Coal were only provisionally determined. The value of the shares of Die (PI I million) and the net assets of Coal (P 7.5 million) on January 1, 201 5, were finally determined on November 30, 2015. However. The directors of Die have seen the value of the company decline since January 1, 2015, and as Of February 1, 201 6, wish to change the value of the purchase consideration to P9 million. What value should be placed on the purchase consideration and assets of Coal as at the date of acquisition?