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    Problem 2

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    G-Malacas, Sheryn Mae
    Kenly Ltd. acquired all the assets and liabilities of DKA Ltd. in December 2020 in exchange for issuing 100,000 shares. The fair values of DKA Ltd.'s assets and liabilities at the acquisition date included cash of P50,000, furniture and fittings of P20,000, accounts receivable of P5,000, plant of P131,000, accounts payable of P15,000, current tax liability of P8,000, and provision for annual leave of P2,000. The fair value per DKA Ltd. share at acquisition was P1.90.

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    Problem 2

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    G-Malacas, Sheryn Mae
    12 views1 page
    Kenly Ltd. acquired all the assets and liabilities of DKA Ltd. in December 2020 in exchange for issuing 100,000 shares. The fair values of DKA Ltd.'s assets and liabilities at the acquisition date included cash of P50,000, furniture and fittings of P20,000, accounts receivable of P5,000, plant of P131,000, accounts payable of P15,000, current tax liability of P8,000, and provision for annual leave of P2,000. The fair value per DKA Ltd. share at acquisition was P1.90.

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    Kenly Ltd. acquired all the assets and liabilities of DKA Ltd. in December 2020 in exchange for issuing 100,000 shares. The fair values of DKA Ltd.'s assets and liabilities at the acquisition date included cash of P50,000, furniture and fittings of P20,000, accounts receivable of P5,000, plant of P131,000, accounts payable of P15,000, current tax liability of P8,000, and provision for annual leave of P2,000. The fair value per DKA Ltd. share at acquisition was P1.90.

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    12 views1 page

    Problem 2

    Uploaded by

    G-Malacas, Sheryn Mae
    Kenly Ltd. acquired all the assets and liabilities of DKA Ltd. in December 2020 in exchange for issuing 100,000 shares. The fair values of DKA Ltd.'s assets and liabilities at the acquisition date included cash of P50,000, furniture and fittings of P20,000, accounts receivable of P5,000, plant of P131,000, accounts payable of P15,000, current tax liability of P8,000, and provision for annual leave of P2,000. The fair value per DKA Ltd. share at acquisition was P1.90.

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    of 1

    2. On December 2020, Kenly Ltd. acquired all the assets and liabilities of DKA Ltd.

    with
    Kenly Ltd. issuing 100,000 shares to acquire these net assets. The fair value of DKA Ltd.
    assets and liabilities at this date were:
    Cash P50,000
    Furniture and Fittings 20,000
    Accounts Receivable 5,000
    Plant 131,000
    Accounts Payable (15,000)
    Current Tax Liability (8,000)
    Provision for annual leave (2,000)

    The financial year for DKA Ltd. is January -December.


    The fair value of each DKA Ltd. share at acquisition date is 1.90. At acquisition date, the
    acquirer could only determine a provisional fair value for the plant. On March 1, 2021, DKA
    Ltd. received the final value from the independent appraisal, the fair value at acquisition date
    being P131,000. Assuming the plant ad a further five-year life from the acquisition date.
    The amount of goodwill arising from the business combination at December 1, 2020?

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