How much is the total effect of share premium on December 31, 20x1? On January 1, 20x1,

How much is the total effect of share premium on December 31, 20x1?

 

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On January 1, 20x1, Lopez Corporation acquired the next assets of Marasigan by paying cash of $1,000,000 and issuing 100,000 ordinary shares with par value of $100 and market value of $120. Also, the entity agrees to issue additional 1,000 ordinary shares to the former owners of Marasigan if the market price per share of Lopez's share increase to $140 per share as of December 31, 20x1. After consideration to the vesting conditions, Mendoza estimated that the fair value of the contingent consideration on January 1, 2020 is $300,000. The statement of financial position of Lopez and Marasigan has the following information: Lopez Book Value Fair Value Assets Liabilities 25,000,000 26,000,000 7,000,000 7,000,000 Warranty liability Customer lists Tradename Marasigan 10,000 5,000 10,000 50,000 Book Value 10,000,000 1,800,000 Fair Value The following items are not reported in Marasigan's financial position: Future cost savings 12,500,000 1,900,000 Lopez holds a building which is being rented out to Marasigan under operating lease. Lopez determines that the terms of the operating lease on the building compared to market value are favorable and the fair value of the deferential is estimated at $40,000. Lopez also paid the following costs: brokers fee $20,000; SEC registration of stock issued $4,000; indirect costs $5,000; printing of share certificates $1,000 and listing fees of shares $2,000 The share price of Lopez's share on December 31, 2020 is $130. On January 1, 20x1, Lopez Corporation acquired the next assets of Marasigan by paying cash of $1,000,000 and issuing 100,000 ordinary shares with par value of $100 and market value of $120. Also, the entity agrees to issue additional 1,000 ordinary shares to the former owners of Marasigan if the market price per share of Lopez's share increase to $140 per share as of December 31, 20x1. After consideration to the vesting conditions, Mendoza estimated that the fair value of the contingent consideration on January 1, 2020 is $300,000. The statement of financial position of Lopez and Marasigan has the following information: Lopez Book Value Fair Value Assets Liabilities 25,000,000 26,000,000 7,000,000 7,000,000 Warranty liability Customer lists Tradename Marasigan 10,000 5,000 10,000 50,000 Book Value 10,000,000 1,800,000 Fair Value The following items are not reported in Marasigan's financial position: Future cost savings 12,500,000 1,900,000 Lopez holds a building which is being rented out to Marasigan under operating lease. Lopez determines that the terms of the operating lease on the building compared to market value are favorable and the fair value of the deferential is estimated at $40,000. Lopez also paid the following costs: brokers fee $20,000; SEC registration of stock issued $4,000; indirect costs $5,000; printing of share certificates $1,000 and listing fees of shares $2,000 The share price of Lopez's share on December 31, 2020 is $130.

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