Honesty Company started negotiating for the acquisition of Integnity Company. The offer wasfor shareholders of Integrity to receive one Honesty share with a market value of P125 forevery four shares held in exchange for all assets of Integrity (except shares in listedcompanies). In addition to the shares, Honesty will transfer its shares in listed companies whichhas a fair market value of P750,000. Honesty will also pay integrity sufficient cash to enableIntegrity to pay all its creditors then Integrity will liquidate. The shareholders of Integrityaccepted the offer. The Balance Sheet on December 31, 2020 is given below (see imagebelow).The net assets of Integrity are reflected at their fair values except for the following:Inventory, P1,300,000 fair market valueLand and building, P4,000,000 fair market valueShares in listed companies, P900,000 fair market valueHow much is the total assets of Honesty after the merger?Honesty7,250,0001,700,0002,800,000800,0003,500,0006,500,00022,550,000Integrity260,0001,065,0001,500,0001,100,0002,000,0005,250,00011,175,000CashAccounts ReceivableInventoryShares in listed companyLand and BuildingProperty, Plant and EquipmentTotalAccounts PayableMortgage LoanShare Capital, P50 parRetained Earnings3,250,0007,500,00010,000,0001,800,0002,000,0001,500,0007,500,000175,00011 175 000Total22 550 000

The Total Assets of the Parent Company immediately after the merger shall be calculated as…

Answered: ofter was Honesty Company started…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Firm E is going to acquire Firm F. The acquisition will be done via a share exchange, whereby Firm E will exchange 2.65 of its shares for every one of Firm F's shares. Synergy is $1,250,000 in total. Firm E has 350,000 shares outstanding trading at $35 each. Firm F has 45,000 shares outstanding trading at $84 each. What would the exchange ratio have to be for the NPV of the deal to be zero? Question 1 options: A) 3.13 shares of E for every 1 of F B) 0.41 shares of E for every 1 of F C) 3.15 shares of E for every 1 of F D) 2.40 shares of E for every 1 of F E) 3.19 shares of E for every 1 of F
PLease show the complete solution. Thank you Mashiho Company acquires 18% of Junkyu Company’s stock for P700,000 cash and carries the investment as a financial asset. A few months later, Mashiho purchases another 70% percent of Junkyu Company’s stock for P2,520,000. At the said date, Junkyu Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,250,000. Its liabilities have a book and fair values of P1,500,000 and 1,900,000, Required: Determine the amount of goodwill or gain on bargain purchase that should be recognized if the non- controlling interest is measured on a proportionate Determine the amount of goodwill or gain on bargain purchase that should be recognized if the non- controlling interest is measured on a fair value
Journey Company entered into agreement with its creditor to exchange its equity instrument and land in place of the financial liability with principal of P5,000,000 and accrued interest of P400,000. The terms of the exchange were 300,000 ordinary shares with P5 par value and P10 fair value. The land transfer has book value of P1,000,000 and fair value of P1,500,000. How much is the gain (or loss) from the extinguishment of the financial liability?
From the data given, compute the goodwill or gain from bargain purchase for the different items. If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P20 par value shares with a fair value of P40 per share, incurs a mortgage loan for P90,000, pays P150,000 cash and paying direct, indirect and stock issue costs of P75,000, P50,000 and P40,000 respective. What is the amount of GOODWILL?
On 8 August 20x3, alpha Ltd acquired 20000 shares in Beta Ltd (Beta) that gave alpha control over Beta in return for 10000 of its own shares. at that date, Alpha's Shares had a market value of $2.70 each, while Beta's Share had a market value of $1.30 each. Fees paid to legal advisers for the transaction totalled $2000. What is the fair value of the consideration transferred?
From the data given, compute the goodwill or gain from bargain purchase for the different items. If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P10 par value shares with a fair value of P20 per share, entered into a mortgage loan of P290,000 and paying direct cost and stock issue cost of P50,000 and P20,000 respectively, a P25,000 direct cost and a P50,000 indirect cost however remain unpaid. Compute for the GOODWILL.
Konin Corporation (KC) acquires a 75% interest in Bartovia Corporation (BC), in exchange for cash of €360,000. BC has 25% of its shares traded on an exchange; KC acquired the 60,000 non-publicly traded shares outstanding, at €6 per share. The fair value of BC’s identifiable net assets is €300,000; the shares of BC at the acquisition date are traded at €5 per share. •Under the full fair value approach, the non-controlling interest is measured based on the trading price of the shares of entity BC at the date control is obtained by KC (€5 per share) and a value of €100,000 is assigned to the 25% non-controlling interest, indicating that KC has paid a control premium of €60,000 (€360,000 – [€5 × 60,000]): •Equity Non-controlling interest in net assets €5×20,000 = €100,000 CAN YOU EXPLAIN HOW WE GOT THE ALL OF THE NUMBERS STEP BY STEP BECAUSE I STILL DON'T UNDERSTAND :)
If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P20 par value shares with a fair value of P40 per share, incurs a mortgage loan for P90,000, pays P150,000 cash and paying direct, indirect and stock issue costs of P75,000, P50,000 and P40,000 respective. Compute for the total assets at the date of acquisition
From the data given, compute the goodwill or gain from bargain purchase for the different items. If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P10 par value shares with a fair value of P20 per share, entered into a mortgage loan of P290,000 and paying direct cost and stock issue cost of P50,000 and P20,000 respectively, a P25,000 direct cost and a P50,000 indirect cost however remain unpaid. Compute for the consolidated total liabilities at the date of acquisition.
Required: i)Determine the gain for World Cruise Bhd. when it acquires Sunrise Cruise Bhd. (ii) World Cruise Bhd. is proposing to finance by cash the deal to purchase all of Sunrise Cruise Bhd.’s issued shares and is offering a premium of 25% over the market price of Sunrise Cruise Bhd.’s shares.Calculate the cost of acquisition of Sunrise Cruise Bhd. (iii) Suggest what should be recommended by Jack Pang to the Board of Directors on the proposed acquisition of Sunrise Cruise Bhd. and why Sunrise’s shareholders should accept the offer.
On January 1, 2022, De Lorean Company acquired 10,000 ordinary shares of Marty Company for P10 per share. The ownership stake in Marty Company is 10%. De Lorean Company purchased Marty Company’s shares solely for trading and treats the same as FVPL investments. For the acquisition, De Lorean Company paid brokerage fees amounting to P10,000. At what amount should De Lorean Company value its investment at the time of purchase?
Cardo co purchases the net assets of allana co by issuing 50000 shares of their 20 par value shares with a fair value of 40 per share , pays 100000 cash, and payin direct and indirect cost of 75000 and 50000 respectively, determine the total amount of assets to be reported by Cardo Co. after the acquisition

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