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Problem 3
Problem 3
The X Company acquired the net assets of the Y Company on January 1, 2020 and made
the following entry to record the purchase:
Current Assets P100,000
Equipment 150,000
Land 50,000
Buildings 300,000
Goodwill 100,000
Liabilities P80,000
Common stock, P1 par 100,000
Paid-in capital in excess of par 520,000
Assuming that the additional shares on January 1, 2022 would be issued on that date to
compensate for any fall in the value of X Company common stock below P16 per share, the
settlement would be to cure the deficiency by issuing added shares based on their fair values
on January 1, 2022. The fair price of the shares on January 1, 2022 was P10.
What is the additional number of shares issued on January 1, 2022 to compensate for any fall
in the value of the stock?