CHAPTER 14

MULTIPLE CHOICES - COMPUTATIONAL

14-1: d

Price paid (8,000 shares x P30) P240,000

Contingent consideration 5,000

Acquisition cost P245,000

14-2: b

Purchase price P250,000

Less: Fair value of net assets acquired 180,000

Goodwill P70,000

14-3: c

Purchase price (100,000 shares x P36) P3,600,000

Contingent consideration 120,000

Total costs P3,720,000

14-4: d

Price paid (600,000 shares x P50) P30,000,000

Less: goodwill recorded 6,120,000

Fair value of net assets acquired P23,880,000

 Capital stock issued (600,000 shares x P10) P 6,000,000

APIC (600,000 shares xP40) – P30,000 23,970,000

Increase in CJ’s equity P29,970,000

14-5: d

Price paid P2,550,000

Less: Fair value of net assets acquired

Current assets P1,100,000

Plant assets 2,200,000

Liabilities ( 300,000) 3,000,000

Income from acquisition P( 450,000)

APIC: [(P2,550,000 – P1,200,000) - P35,000*] P1,315,000

*Costs of SEC registration P12,000

Cost of issuing stock certificates 3,000

Documentary stamp tax 20,000

Total P35,000