Adolf Company had ordinary shares of P350,000 and retained earnings of P490,000.

Clemente
Company had ordinary shares of P700,000 and retained earnings of P980,000. On January 1, 2019,
Clemente Company issued 34,000 ordinary shares with a P12 par value and a P35 fair value for all of
Adolf Company’s outstanding ordinary shares. This combination was accounted for as an
acquisition. Immediately after the combination, what was the consolidated net asset?

Group of answer choices

P1,680,000

P1,190,000

P2,520,000

P2,870,000

BEA Co. merged into PIA Co. on June 30, 2023. In exchange for the net assets at fair market value
of BEA Co. amounting to P2,785,800, PIA issued 68,000 common shares at P36 par value, then
going at a market price of P41 per share. Out of pocket costs of the combination were as follows (all
amounts are in Philippine Peso): Ø Legal fees for the contract of business combination 174,700 Ø
Audit fee for SEC registration of stock issue 198,400 Ø Printing cost of stock certificates 144,900 Ø
Broker’s fee 135,000 Ø Accountant’s fee for pre-acquisition audit 161,000 Ø Other direct cost of
acquisition 90,400 Ø General and allocated expenses 115,300 Ø Listing fees in issuing new shares
172,000 What is the amount of expense to be recognized in the statement of comprehensive income
for the year ended December 31, 2023?

Group of answer choices

P765,400

P851,700

P1,191,700

P676,400

Polk issues ordinary shares to acquire all the assets of Sam Company on January 1, 20x5. There is a
contingent share agreement, which states that if the income of the Sam Division exceeds a certain
level during 20x5 and 20x6, additional shares will be issued on January 1, 20x7. The impact of
issuing the additional shares is to

Group of answer choices

Have no effect an asset values, but to reassign the amounts assign to equity accounts

1
Record additional goodwill

Reduce retained earnings

Increase the price assigned to fixed assets

Octane Company and Bio Company have announced terms of an exchange agreement under which
Octane will issue 10,000 shares of its P5 par value ordinary shares to acquire all of Bio's assets.
Octane shares are trading at P28, and Bio's P10 par value shares are trading at P15. Historical cost
and fair value balance sheet data on January 1, 2016, are as follows: Octane Company Bio Company
Book Value Fair Value Book Value Fair Value Cash 125,000 125,000 25,000 40,000 Land 75,000
120,000 30,000 50,000 Buildings and Equipment 180,000 220,000 120,000 150,000 TOTAL
ASSETS 380,000 465,000 175,000 240,000 Ordinary Share Capital 150,000 100,000 Share Premium
60,000 20,000 Retained Earnings 170,000 55,000 TOTAL EQUITIES 380,000 175,000 Based on the
information provided, what amount will be reported for Share Premium in the combined company's
statement of financial position immediately following the business combination?

Group of answer choices

P290,000

P310,000

P80,000

P60,000

The VICE Company had these accounts at the time it was acquired by SOHO Company (all amounts
are in Philippine Peso): Cash 36,000 Accounts receivable 457,000 Inventories 120,000 Property,
plant and equipment 696,400 Accounts payable 350,800 SOHO SOHO Company paid P1,400,000
for the net assets of VICE Company. It was determined that the fair market values of inventories and
PPE were P133,000 and P900,000, respectively. An assumed contingent liability with a fair value
amounting to P10,000 and such amount is considered reliable measurement. Also, a P25,000 future
losses or reorganization/restructuring cost are expected to be incurred as a result of the business
combination. In the books of SOHO Company, this transaction resulted in

Group of answer choices

Goodwill recorded at P224,800

Goodwill recorded at P234,800

Gain on acquisition recorded at P224,800

2
Current assets increased by P234,800.

he 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 Company pays
P100,000,000 in cash for Salt Company’s assets and liabilities. Pail records goodwill of:

Group of answer choices

P72,500,000

P66,800,000

P77,500,000

P50,800,000