The SM Company will issue share at P10 par value common stock for all the net...
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The SM Company will issue share at P10 par value common stock for all the net assets of the ACE Company SM's common has current market value of P40 per share. ACE's balance sheet accounts are shown below: Current assets P320,000 Property and equipment 880,000 Liabilities 400,000 Common stock, P4 par 80,000 Additional paid-in capital 320,000 Retained earnings 400,000 The fair value of current assets is P400,000 while that of property and equipment is P1,600,000. All the liabilities are correctly stated SM issued sufficient shares so that the fair market value of the stock equals the fair market value of ACE's net assets plus goodwill of P200,000. How much must be the cost of investment if goodwill of P200,000 must be recognized? The SM Company will issue share at P10 par value common stock for all the net assets of the ACE Company SM's common has current market value of P40 per share. ACE's balance sheet accounts are shown below: Current assets P320,000 Property and equipment 880,000 Liabilities 400,000 Common stock, P4 par 80,000 Additional paid-in capital 320,000 Retained earnings 400,000 The fair value of current assets is P400,000 while that of property and equipment is P1,600,000. All the liabilities are correctly stated SM issued sufficient shares so that the fair market value of the stock equals the fair market value of ACE's net assets plus goodwill of P200,000. How much must be the cost of investment if goodwill of P200,000 must be recognized?
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To calculate the cost of investment that results in goodwill of P200000 we need to first determine ... View the full answer
Related Book For
Horngrens Financial And Managerial Accounting The Financial Chapters
ISBN: 9780134486840
6th Edition
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura
Posted Date:
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