To recognize goodwill of P300,000, how many shares were to be issued?Red Corporation will isue common shares with a par value of P10 for the net assets of Blue Company. Red's Common stock hasa current market value of P40 per share. Blue's statement of financial position on the date of acquisition follow:Current assetsP320,000Common stock, P5 parP80,000Additional paid in capitalProperty and EquipmentLiabilities880,000320,000400,000Retained Earnings400,000Blue's current assets are appraised at P400,000 and the property and equipment was also appraised at P1,600,000. Its liabilitiesare fairly value. Accordingly, Red Corporation issued shares of its common stock with a total market value equal to that of Blue'snet assets including goodwill. Red also paid P60,000 acquisition costs, 80% were direct and the remainder are indirect costs.

Acquisition goodwill is the difference between the consideration paid and the fair value of the net…

To recognize goodwill of P300,000, how many shares were to be issued? Red Corporation will issue common shares with a par value of P10 for the net assets of Blue Company. Red's Common stock has a current market value of P40 per share. Blue's statement of financial position on the date of acquisition follow: Common stock, P5 par Additional paid in capital Retained Earnings Blue's current assets are appraised at P400,000 and the property and equipment was also appraised at P1,600,000. Its liabilities are fairly value. Accordingly, Red Corporation issued shares of its common stock with a total market value equal to that of Blue's net assets including goodwill. Red also paid P60,000 acquisition costs, 80% were direct and the remainder are indirect costs. Current assets P320,000 P80,000 Property and Equipment 880,000 320,000 Liabilities 400,000 400,000

To recognize goodwill of P300,000, how many shares were to be issued? Red Corporation will issue common shares with a par value of P10 for the net assets of Blue Company. Red's Common stock has a current market value of P40 per share. Blue's statement of financial position on the date of acquisition follow: Common stock, P5 par Additional paid in capital Retained Earnings Blue's current assets are appraised at P400,000 and the property and equipment was also appraised at P1,600,000. Its liabilities are fairly value. Accordingly, Red Corporation issued shares of its common stock with a total market value equal to that of Blue's net assets including goodwill. Red also paid P60,000 acquisition costs, 80% were direct and the remainder are indirect costs. Current assets P320,000 P80,000 Property and Equipment 880,000 320,000 Liabilities 400,000 400,000

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 1BCRQ

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