A condensed balance sheet on August 31, 2007 and related current…

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Question Answered step-by-step A condensed balance sheet on August 31, 2007 and related current… A condensed balance sheet on August 31, 2007 and related current fair value data for ABC Company are presented below:ABC CompanyBalance SheetAugust 31, 2007 Carrying AmountFair ValueAssets:     Current AssetsP736,000P809,000   Plant Assets1,185,0001,380,000   Patent (net)117,00096,000Total AssetsP2,038,000 Liabilities and Stockholders’ Equity:     Current LiabilitiesP215,000P215,000   Long-term debt560,000595,000   Capital stock, P20 par420,000    Retained earnings843,000 Total Liabilities and Stockholders’ EquityP2,038,000  Case I: Assume the following:On September 1, 2007, XYZ Corporation issued 17,800 of its P29 par value common stock (current fair value P45 per share) and P502,000 cash for the net assets of ABC Company. Of the P385,000 out-of-pocket costs paid by XYZ on September 1, 2007, P163,000 were indirect costs and the remainder were legal fees and finders’ fees related to the business combination. Stock issuance cost amount to P80,000. Assume the following data for XYZ Company: Book ValueFair ValueTotal AssetsP5,000,000P7,000,000Total Liabilities3,000,0003,000,000CS (P29 par)290,000 APIC910,000 RE800,000  Compute the following:Goodwill/Income from acquisitionTotal CS after combinationTotal RE after combinationTotal APIC after combinationTotal liabilities after combinationTotal assets after combinationTotal SE after combination Case II: Assume the following: On September 1, 2007, XYZ Corporation issued 20,000 of its P29 par value common stock (current fair value P45 per share) and P502,000 cash for the net assets of ABC Company. Of the P385,000 out-of-pocket costs paid by XYZ on September 1, 2007, P163,000 were indirect costs and the remainder were legal fees and finders’ fees related to the business combination. Stock issuance cost amount to P400,000. Also, there was a contingent consideration of P100,000. Assume the following data for XYZ Company:    Book ValueFair ValueTotal AssetsP5,000,000P7,000,000Total Liabilities3,000,0003,000,000CS (P29 par)290,000 APIC910,000 RE800,000  Compute the following:Goodwill/Income from acquisitionTotal CS after combinationTotal RE after combinationTotal APIC after combinationTotal liabilities after combinationTotal assets after combinationTotal SE after combination Business Accounting ACCCOUNTIN 221 Share QuestionEmailCopy link Comments (0)