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Buscom SW

The document presents a series of true or false statements regarding accounting principles related to net asset acquisitions, followed by a problem-solving section involving the acquisition of Waltz Corporation by Bronze Corporation. It includes financial data for companies A, B, and C, as well as details on the balance sheet of Waltz Corporation and the costs associated with the acquisition. The document concludes with questions related to the computation of total assets, liabilities, retained earnings, goodwill, and fair value of identifiable net assets post-acquisition.

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50 views1 page

Buscom SW

The document presents a series of true or false statements regarding accounting principles related to net asset acquisitions, followed by a problem-solving section involving the acquisition of Waltz Corporation by Bronze Corporation. It includes financial data for companies A, B, and C, as well as details on the balance sheet of Waltz Corporation and the costs associated with the acquisition. The document concludes with questions related to the computation of total assets, liabilities, retained earnings, goodwill, and fair value of identifiable net assets post-acquisition.

Uploaded by

canarcathlynjoy5
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Name: ______________________________________

TRUE OR FALSE. PROBLEM 2. The following are the condensed Statement of


1. The pre-existing goodwill of an acquiree company in a Financial Position of A, B, and C Company on January 1, 2025:
net asset acquisition is identifiable.
2. The shareholder’s equity of the acquiree company is A B C
included in the financial statement of the surviving Total Assets 38,000,000 12,300,000 3,669,000
company under net asset acquisition. Total 9,000,000 3,330,000 960,000
3. Legal fees is an example of acquisition-related costs that Liabilities
should be expensed outright. Ordinary 14,000,000 3,720,000 1,554,000
4. The acquisition date for a business combination is the Shares
date in which the consideration was received by the Share 3,000,000 1,500,000 120,000
acquired company. Premium
5. Goodwill and gain on bargain purchase as a result of Retained 12,000,000 3,750,000 1,035,000
separate business combination, involving a single Earnings
acquirer company, can be offset against each other in a
net asset acquisition of two or more acquiree companies. A Corporation acquired the net assets of both B and C by
issuing 243,750 shares to B and 67,650 shares to C. The par
value of these shares is P25/share and the market value as of
PROBLEM SOLVING. January 1, 2025 is P30/share. A Corp. also paid for the
following expenses:
PROBLEM 1. BRONZE Corporation agrees to acquire the
net assets of WALTZ Corporation on January 1, 2025. Waltz B C
has the following balance sheet: General and Admin 112,500 121,500
Finder’s Fee 79,500 42,000
Assets:
SEC Registration of Newly Issued 412,500 435,000
Accounts Receivable 79,000 Shares
Inventory 112,000 Printing costs of stock certificates 150,000 112,500
Other Current Assets 55,000
Equipment (net) 294,000 8. Compute for the total assets in the books of the surviving
Trademark 30,000 company immediately after the merger
TOTAL ASSETS 570,000 9. Compute for the total liabilities in the books of the
surviving company immediately after the merger
Liabilities and Equity: 10. Compute for the total retained earnings in the books of
Current Liabilities 145,000 the surviving company
Bonds Payable 100,000
Common Stock 200,000
Paid-in Capital in excess of par 50,000
Retained Earnings 75,000
TOTAL LIABILITY AND EQUITY 570,000

An appraiser determines that in-process R&D exists and has


an estimated value of P14,000. The appraisal indicates that the
following assets have fair values that differ from their book
values:

FAIR VALUE
Inventory 120,000
Equipment 307,000
Trademark 27,000

The purchase price is P500,000.

6. How much is the amount of goodwill arising from the


acquisition?
7. What is the amount of fair value of the identifiable net
assets of the acquiree company?

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