Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4. The statement of financial position of Sisa Company on December 31,2013 is as follows: Assets Cash Accounts receivable Inventories Property & equipment Total

image text in transcribed

4. The statement of financial position of Sisa Company on December 31,2013 is as follows: Assets Cash Accounts receivable Inventories Property & equipment Total assets Liabilities and stockholders' equity P100,000 Current liabilities P300,000 200,000 Long-term liabilities 500,000 500,000 Capital stock, P1 par value 100,000 900,000 Retained earnings 800,000 P1,700,000 Total liabilities & equity P1,700,000 On December 31,2013, Pluto Corporation purchases all of the outstanding stock of Sisa Company for P1,500,000 cash. On that date, the fair (market) value of Sisa's inventories and property and equipment are P450,000 and P1,000,000 respectively. The fair values of all other assets and liabilities were equal to their book values. As a result of the acquisition of Sisa's capital stock, Pluto should record goodwill of: a. P500,000 b. P550,000 c. P600,000 d. P-0-

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting

Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith

11th Edition

978-0132568968, 9780132568968

More Books

Students also viewed these Accounting questions