University of Notre DameACCOUNTING 101Buscom Quiz 1 w answers

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Question 1 The LL Company will issue shares of P10 par value common stock for all the assets and liabilities of the OO Company. LL Company’s common stock has a current market value of P40 per shar... e. The OO Company’s net assets were as follows: Current Assets 1,280,000 Non-Current Assets 3,520,000 Liabilities 1,600,000 The fair market value of the current assets is P1,600,000 while that of the non-current assets is 6,400,000. All of the liabilities are correctly stated. LL Company issued sufficient shares of stock so that the fair market value of the stock is equal the fair market value of OO Company’s net assets. To have an income from acquisition of P400,000, the number of shares to be issued by LL should be? Answer: 150,000 Solution: Question 2 On June 10, 2016, K Company purchases 8,000 shares of J Company for P64 per share. Just prior to the purchase, J Company had the following statement of financial position: Assets Liabilities and Equity Cash 20,000 Current Liabilities 250,000 Inventory 280,000 Common Stock, P5 par 50,000 Equipment 500,000 APIC 130,000 Retained Earnings 370,000 TOTAL 800,000 800,000 On June 10, 2013, J inventory has a fair value of P400,000. What is the amount of NCI interest in the consolidated statement of financial position on the date of acquisition? [Show More]

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