rted by Alakdan Co. ii. The total assets of Alakdan Co. after the business combination. iii. The total stockholders equity of Aklan Co after the business combination. iv. The journal entries to be made by Alakdan Co. for the busin

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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If Alakdan Co., a new company would acquire the net assets of Cardo and Allana Company by
issuing 50,000 shares of P25 par value ordinary shares with fair value of P130 per share and
paying professional finders fee and stock registration costs of P125,000 and P65,000, respectively,
determine:
i. The total amount of Goodwill to be reported by Alakdan Co.
ii. The total assets of Alakdan Co. after the business combination.
iii. The total stockholders equity of Aklan Co after the business combination.
iv. The journal entries to be made by Alakdan Co. for the business combination.

The following balances were taken from the trial balance of CARDO Company
and ALLANA Company at the start of the fiscal year 2018:
CARDO Co
ALLANA Co
Book Value
Fair Value
Book Value
Fair Value
Р3,000,000
200,000
150,000
5,000,000
650,000
4,000,000
3,000,000
1,800,000-
200,000
P3,000,000
215,000
140,000
5,300,000
700,000
4,200,000
P750,000
100,000
50,000
2,000,000
100,000
1,500,000
750,000
500,000
250,000
P750,000
90,000
40,000
2,100,000
80,000 -
1,450,000
Cash
Accounts rec.
Inventory
PPE (10years)
Goodwill
Accounts pay.
Ordinary shares
APIC
Accumulated earnings
25
Transcribed Image Text:The following balances were taken from the trial balance of CARDO Company and ALLANA Company at the start of the fiscal year 2018: CARDO Co ALLANA Co Book Value Fair Value Book Value Fair Value Р3,000,000 200,000 150,000 5,000,000 650,000 4,000,000 3,000,000 1,800,000- 200,000 P3,000,000 215,000 140,000 5,300,000 700,000 4,200,000 P750,000 100,000 50,000 2,000,000 100,000 1,500,000 750,000 500,000 250,000 P750,000 90,000 40,000 2,100,000 80,000 - 1,450,000 Cash Accounts rec. Inventory PPE (10years) Goodwill Accounts pay. Ordinary shares APIC Accumulated earnings 25
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