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    Business Combi YTvideo

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    Business Combi YTvideo

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    26 views21 pages

    Business Combi YTvideo

    Uploaded by

    Cherryjane Ruiz
    Yt

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    © All Rights Reserved
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    tusvation: Business combination through acquisition of et sits (n January 1, 2020, Manwel nc. acqued the net assets af Wikon Company by pang cash of 00,00 | ‘rect to Wikon together with a 10% terest bering nae of 250,00 In adi, Maxwell abo sued 5000cf sown share wih 2 par value of F100 and market vale ofP120to Wilson Company. The acquire also ncuredthe following: ‘+ Paid 40,000 to broker who aranged the transfer ofthe net assets. Legal fesin pi forthe ranster ofthe ae anaes were paid tP6O,000, {Sec ing fees of 2,000 or he suance ofthe shares were ao pei on the same at 1 Paidconstan’ ees f P0000. ison had the following aecoun balance so Januar 1, 2020: ‘Wison Company BookvalveFairValve 250000 "250,000 320.000 600.000 atthe scqton cont purchase pce) of tenet sets of Wibon company? ‘not amour was chrge to buses combination expense? amputee ava fhe et ets fan. "=m Cempst the ot of ooo suing rom te bsneseombmaten. a ——— ch 600,000 * ‘Ordinary shares (120% 5,000 shares -con000 The 500 shares sues wl es to ota nhided n acqubstion cost) Cs 1,350,000] (88 Dee conan ements /DACS -9 > nae — | the amount o share premium willbe reduced by the SEC fling fes of 10,000.35 folows (Co tok sue costs pi) 19000 Soe (ah toe ee cos.) 1000 Reauirement 3 Eeuipment~ net “S00.000 ‘Accounts payable (40000) ther abies ‘Goodwil/ (Gain on bargain prehare) 00.00 - (aa 1,350,000] ‘Goh oto Inventories 00.000 Equipment” et 00.000 ‘ecourtspayable 80000 Notes pyabie 150,000, Stare premium 100,900, Busnes combination eae Banoo Stare premium 10,000 ‘nana 1. 2020 of ranger e's net ast ecg cash as sme Km Co. ‘Errand eh any apron of sequion S800 besa er ‘encanton Gurerne won soos ‘er conese tener ancl Potion mame prt te conan te presente lw 038/100 my eage omen" sonom mam == Bam ces een ont (000) Feo Toned ie sequin fot suet Ten res cmt cmt: Pen ‘oto00| oc cron hows zo tases 8 sna shore |" domo oman ‘This requirement is not part of the step by step combination process. Rather, itis a separate process on how the acquiree records the sale of net assets and subsequent dissolution. ilustration: Acquistion of ordinary shares. acquired all of Missy Company's 10,000 outstanding ordinary avin P1,000,000 cash, The net assets of Missy at fair valve were P3,200,000. Requirements: ‘TRUE OR FALSE ‘After the acquisition: Sheldon Corp. has control over the business of Missy Co. 3. Missy will continue to operate asa separate legal entity. [Missy Co. i a subsidiary of Sheldon Corp. Sheldon Corp. and Missy Co. are still considered as separate economic entities. Sheldon Corp. paid P2,000,000 directly to Missy Co. Sheldon Corp. willbe required to prepare consolidated financial statements. 7. The acquisition will result in an increase of P200,000 inthe retained earnings of Sheldon Corp's separate financial statements. reall of Missy Company's 10,000 outstanding ordinary shares by sash. The het assets of Missy at fair value were P,200,000. nies cy sThe answer to number 7 is false. a a 3. 4 Su 6 7 1. The: ie eed ‘aston Full and Paris Good. ‘Seldon Corp. cgired000 ofthe 10.000 oustanding ordinary shares of Ms Co. by avrg P:000000 cash. The net ates of Mis ata value were P,200000. Aoqulements: ‘Under ea othe following assumptions, compte the amount of good 1 Sheldon optedto measure non-containg interest a a vale 2 Sheldon opted to measure non cotling interest at proprtonat tae of the | Atwhat amount wil the Ne recognize he problem sen as tit ar value x proporionste option? 2 NCI MEASUREMENT OPTIONS: 1.) Fair Market Value of NCI; or 2.) NCI's Proportionate Share in FINA awit nts atv. 0000 caw atncris at Prop 40000 rater Egy model and Cost model (orp eared 80% 0 he ordinary shores ragon Go for 300,09 on away 2020 ‘tthe end of te year. ragon Co. reported pence P200000 arc pak genes fasoate cs tare Requirements: 1 Preporethejoumaenesi 2020 2ssuning Garp ses eau Mode 2) brepore the Jovmaentes in 2020, :ssmng Gap ues Cox mage 3. On December 31, 202, what amount of fvesment i Subs wil beireported suming Garp uses the equly mode! or cost model Under euty method the investment account wil be increased bythe proportionate share in netincome of te subscary and decreased by te share nina. out metho, n essere, accounting forthe investment ona owner perspective nth + when the business ofthe ubssary grows [ue rotable operations) he owes SOUS ‘eapthe reward ofthe prowth and record. share inthe roi eared + Consequently, when the subssary declines (le. neta the owner ules and deducts “Toe. Eat method adds Investment income sr deducts dends to imvestment balance Requirement: Inthe parent’ books, the investment canbe recorde in ether ofthe two model 35 lows: uty Model Cost Model Investment in Subsiary Investment in Subsidiary 30,000 30000 cometfom subsidiary 160000 Oidends 120000 Ee aes .~ eM sr \Whyisitimpartant to determine investment income FS} /avidend income (7 ‘Srsoated act nce sould ony elt he argu finer earnea bye ro et nse thefesowngiocestatements os pies tla, EM foe sans sae Sooo +1300 7 teametomsabadny / OL “isha cone Sisars0 | tomo te Cotes Yisouco “soaro (er Opening ernie Ceorecaten tone sono vatican st Wastin: Amortation of overauation /undervaluation of net ae. htebearézequred 75% of he orinary shares f Shanks Ondanvary2s2020, On te same Ate, the folowing ae dat taen om the records Stars Company ook Value Falrvalve (OVAN/UVA Aventis ‘sopan —s75000 75000 Sutin net 1200c00 1.350.000 50000 Equipment net ‘jon000 Soc,coo 400.000) ‘The butting & equipment had remaining Me of S years and 10 years respective. The undervalued inventory was so by December 31,2020 shanks reported he following condensed income statement on December 31,2020 Sales 1,500.00 est Cos of ales peteny ros prot 700000 Les: Operating expenses Depreciation = Bling 240.000 Depreciation = Eauipment 0,000 tne expenses 00800 etincome Sanam Required: {nat mount of ingame from subsiar wil be reported bythe parent? Soon tuiangs Hn {sn} 1520007 5ye0s) covn—tqupnnt + con 100,000/s0 eon) faustceeticone amy — “208000 Cenceing tere 1. ircome tom ary Tana

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