On January 1, 20x4, the Alpha Company entered into a transaction for acquisition of assets and liabilities of Beta Company.Alpha issued P400 in long-term liabilities and 40 shares of ordinary shares having a par value of P1 per share but a fair value of P10 pershare. Alpha paid P20 to lawyers, accountants and brokers for assistance in bringing about this purchase. Another P15 was paid inconnection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows:Item....Alpha .BetaCash..P 180 ..P 40Accounts Receivable......810..180Inventory...1,080.. 280Land.. 600.. 360Buildings (net)...1,260.. 440Equipment (net)..480... 100.....-Accounts Payable........( 450)..( 80)Long-term liabilities......(1,290)..( 400)Ordinary Shares, P1 par....( 330)Ordinary Shares, P20 par.( 240)Share Premium..( 1,080)..( 340)Retained Earnings.......(1,260).. ( 340)Note: Parentheses indicate a credit balance. In Alpha 's appraisal of Beta, three assets were deemed to be undervalued on the books of Beta: Inventory by P10, Land by P40 andBuildings by P60.(Do not use comma for the answers below on questions, Follow this format: P1 250 000)1. If the transaction is accounted for as an acquisition, what is the amount of consideration transferred? P8002. Compute the amount of inventories after combination.3. Compute the amount of buildings (net) after combination.4. Compute the amount of land after combination.5. Compute the amount of equipment after combination.6. Compute the amount of ordinary shares at after combination,7. Compute the amount of share premium at after combination.8. Compute the amount of cash after combination,

As per Bartleby policy, only the first 3 parts of the interlinked questions are answered.…

1. If the transaction is accounted for as an acquisition, what is the amount of consideration transferred? P800 2. Compute the amount of inventories after combination, 3. Compute the amount of buildings (net)after combination. 4. Compute the amount of land after combination,

1. If the transaction is accounted for as an acquisition, what is the amount of consideration transferred? P800 2. Compute the amount of inventories after combination, 3. Compute the amount of buildings (net)after combination. 4. Compute the amount of land after combination,

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter20: Corporations: Organization And Capital Stock

Section: Chapter Questions

Problem 1CP: Prepare general journal entries for the following transactions, identifying each transaction by...

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Prepare general journal entries for the following transactions, identifying each transaction by letter: (a) Gnu Company issued 5,000 shares of 1 par common stock to the Prendergas law firm as partial payment of fees incurred to incorporate the business. Gnu was short of cash, so Prendergas agreed to accept 10,000 cash and the shares of common stock in full settlement of its bill for 55,000. (b) Gnu issued 50,000 shares of 1 par common stock in exchange for a parcel of land for building a shopping plaza. (The list price for the land was 400,000; a similar parcel in the same area sold last week for 380,000. During the past month, the price at which Gnus common stock has traded on the open market has ranged from 5 to 12 per share. Two trades occurred yesterday at 7 and 10 per share.) (c) Gnu purchased 10,000 shares of 1 par value common treasury stock for 70,000. (This is the only treasury stock that Gnu holds.) (d) Gnu sold 4,000 shares of common treasury stock for 32,000. (e) Gnu sold 5,000 shares of common treasury stock for 30,000.
On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets and liabilities of Ana Company. Sara issued P400 in long-term liabilities and 40 shares of common stock having a par value of P1 per share but a fair value of P10 per share. Sara paid P20 to lawyers, accountants and brokers for assistance in bringing about this purchase. Another P15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Sara Ana Cash P180 P 40 Accounts receivable 810 180 1,080 600 Inventory 280 Land 360 Buildings (net) Equipment (net) Accounts Payable Long-term liabilities Common stock, P1 par Common stock, P20 par 1,260 440 480 100 ( 450) (1,290) (330) ( 80) (400) Additional paid-in capital Retained earnings (1,080) (1,260) (240) (340) (340) In Sara's appraisal of Ana, three assets were deemed to be undervalued in the books of Ana: Inventory by P10, Land by P40 and Buildings by P60. Compute the…
On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets and liabilities of Ana Company. Sara issued P400 in long-term liabilities and 40 shares of common stock having a par value of P1 per share but a fair value of P10 per share. Sara paid P20 to lawyers, accountants and brokers for assistance in bringing about this purchase. Another P15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Sara Ana Cash P180 P 40 Accounts receivable 810 180 Inventory 1,080 280 Land 600 360 Buildings (net) 1,260 440 Equipment (net) 480 100 Accounts Payable ( 450) ( 80) Long-term liabilities (1,290) (400) Common stock, P1 par (330) Common stock, P20 par (240) Additional paid-in capital (1,080) (340) Retained earnings (1,260) (340) In Sara’s appraisal of Ana, three assets were…
1. On January 1, 2013, the Sara Company entered into a transaction for acquisition of assets andliabilities of Ana Company. Sara issued P400 in long-term liabilities and 40 shares of common stockhaving a par value of P1 per share but a fair value of P10 per share. Sara paid P20 to lawyers,accountants and brokers for assistance in bringing about this purchase. Another P15 was paid inconnection with stock issuance costs. Prior to these transactions, the balance sheets for the twocompanies were as follows: Sara AnaCash P180 P 40Accounts receivable 810 180Inventory 1,080 280Land 600 360Buildings (net) 1,260 440Equipment (net) 480 100Accounts Payable ( 450) ( 80)Long-term liabilities (1,290) (400)Common stock, P1 par (330)Common stock, P20 par (240)Additional paid-in capital (1,080) (340)Retained earnings (1,260) (340)In Sara’s appraisal of Ana, three assets were deemed to be undervalued in the books of Ana: Inventoryby P10, Land by P40 and Buildings by P60.1. If the transaction is…
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On September 1, FAITH Inc issued 120,000 shares of its P50 par value ordinary share in exchange for land. On the date of the transaction, the fair value of the ordinary shares, evidenced by its quoted market price in the stock exchange, was P120 per share. The fair value of the land on the same date was valued at P10,000,000. The journal entry to record this transaction includes a debit to Land for how much?
On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…
On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…
On January 1, 20x1, Patrick Corp. acquired the identifiable net assets of Jinky Corp. by paying cash of P1,500,000; issuing 50,000 ordinary shares with a market value of P60 per share. Patrick paid the broker’s fee of P25,000; cost if SEC registration of shares issued amounting to P2,000 and indirect cost of P5,000. The book values of assets of Patrick and Jinky are P15,200,000 and P2,500,000, respectively, and the book values of liability of Patrick and Jinky are P4,000,000 and P800,000. The book value reflects fair value of assets and liabilities except that the current asset of Patrick is overvalued by P200,000 and non-current asset of Jinky Corp is undervalued by P500,000. Patrick Corp. has estimated P400,000 representing cost of exiting the activity of Jinky Corp such as: cost of terminating employees and the cost of relocating terminated employees of Jinky. The agreement also provides that Patrick Corp shall pay cash on January 10, 20x1, equal 120% of the amount by which…