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    Buscom Quiz 2 Midterm

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    Rafael Capunpon Vallejos
    The document provides balance sheet information for Hope Corporation as of January 1, 20x4. It states that on January 2, 20x4, Robin Corporation issued 80,000 shares of common stock to acquire all of Hope's net assets, and Hope was dissolved. It asks to calculate any goodwill from the business combination, and provides four answer choices.

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    Buscom Quiz 2 Midterm

    Uploaded by

    Rafael Capunpon Vallejos
    677 views2 pages
    The document provides balance sheet information for Hope Corporation as of January 1, 20x4. It states that on January 2, 20x4, Robin Corporation issued 80,000 shares of common stock to acquire all of Hope's net assets, and Hope was dissolved. It asks to calculate any goodwill from the business combination, and provides four answer choices.

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    The document provides balance sheet information for Hope Corporation as of January 1, 20x4. It states that on January 2, 20x4, Robin Corporation issued 80,000 shares of common stock to acquire all of Hope's net assets, and Hope was dissolved. It asks to calculate any goodwill from the business combination, and provides four answer choices.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    677 views2 pages

    Buscom Quiz 2 Midterm

    Uploaded by

    Rafael Capunpon Vallejos
    The document provides balance sheet information for Hope Corporation as of January 1, 20x4. It states that on January 2, 20x4, Robin Corporation issued 80,000 shares of common stock to acquire all of Hope's net assets, and Hope was dissolved. It asks to calculate any goodwill from the business combination, and provides four answer choices.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    BUSCOM QUIZ 2 MIDTERM

    Balance sheet information for Hope Corporation at January 1, 20x4, is summarized as follows:
    Current assets …… P 920,000 Liabilities ……................ P 1,200,000 Plant asset ………... 1,800,000
    Capital stock P10 par…. 800,000 Retained earnings……... 720,000 --------------------
    --------------------- P 2,720,000 P 2,720,000 Hope’s assets and liabilities are fairly valued except for
    plant assets that are undervalued by P200,000. On January 2, 20x4, Robin Corporation issues 80,000
    shares of its P10 par value common stock for all of Hope’s net assets and Hope is dissolved. Market
    quotations for the two stocks on this date are: Robin common: P28 Hope common: P19 Robin pays
    the following fees and costs in connection with the combination: Finder’s fee, P10,000 Costs of
    registering and issuing stock, P5,000 Legal and accounting fees, P6,000 Calculate any goodwill from
    the business combination:

    Group of answer choices

    P390,000

    P475,000

    P 85,000

    P520,000

    The balance sheet of Salt Company, along with market values of its assets and liabilities, is as
    follows: Salt Company Book value Market value Dr (Cr) Dr (Cr) Current assets P 2,000,000 P
    1,500,000 Plant & equipment (net) 30,000,000 35,000,000 Patents 100,000 2,000,000 Completed
    technology 0 10,000,000 Broader Customer base 0 16,000,000 Technically skilled workforce
    3,000,000 Potentially profitable future contracts 2,000,000 Licensing agreements 0 4,000,000
    Potential contracts with new customers 1,500,000 Advertising jingles 1,000,000 Future cost savings
    1,800,000 Goodwill 200,000 700,000 Liabilities (28,000,000) (30,000,000) Common stock, P10 par
    (1,000,000) Additional paid-in capital (5,000,000) Retained earnings 1,700,000

    Pail paid P10,000,000 in cash for Salt. Three months later, it is determined that Salt’s acquisition-
    date liabilities omitted a pending lawsuit valued at P2,000,000. The entry to record this information
    includes

    Group of answer choices

    A debit to bargain purchase gain on acquisition of P2,000,000.

    A debit to liabilities of P2,000,000.

    1
    A debit to retained earnings of P2,000,000.

    A debit to goodwill of P2,000,000.

    Manet Corporation exchanges 150,000 shares of newly issued P1 par value common stock with a fair
    market value of P25 per share for all of the outstanding P5 par value common stock of Gardner Inc
    and Gardner is then dissolved. Manet paid the following costs and expenses related to the business
    combination: Cost of special shareholder’s meeting to vote on the merger …............................... P
    13,000 Registering and issuing securities ………………………….........................………... .. 14,000
    Accounting and legal fees ……………….........................……………………...………. 9,000
    Salaries of Manet’s employees assigned to the implementation of the merger……... 15,000 Cost of
    closing duplicate facilities………............................……………………………. 11,000 In the
    business combination of Manet and Gardner:

    Group of answer choices

    All the items listed above except the cost of registering and issuing the securities are capitalized.

    Only the costs of closing duplicate facilities, the salaries of Manet’s employees assigned to the
    merger, and the costs of the shareholders’ meeting would be treated as expense.

    The costs of registering and issuing the securities are deducted from the fair market value of the
    common stock used to acquire Gardner.

    All of the items listed above are treated as expense

    Pail paid P100,000,000 in cash for Salt. Three months later, Salt’s patents are determined to have
    been worthless as of the date of acquisition. The entry to record this information includes

    Group of answer choices

    A debit to retained earnings of P2,000,000.

    A debit to goodwill of P2,000,000.

    A debit to patents of P2,000,000.

    A debit to loss of P2,000,000.

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