COMPUTE FOR THE POST COMBINATION BALANCES AND GOODWILL (NEGATIVE GOODWILL).

SamSam Company and Baste Company agreed to a combination on January 1, 2015. On the date of combination , the companies reported the following data Cash and recenables Inventory Land Plant and equipment Less: Accumulated depreciation Sotal Assets SamSam Book Value Fair Value 144.000 144.000 160.000 240.000 160.000 224,000 640,000 (240,000) 480.000 864,000 1,088,000 Baste Company Book Value Fair Value 32000 32,000 48.000 67200 16.000 24.000 320.000 (128,000) 224,000 288,000 347200 128,000 32000 32.000 128,000 320,000 Current liabilities Ordinary shares, 232 par Ordinary shares, 78 par Share premium Accumulated profits Total liabilities and shareholders equity 32,000 384,000 864,000 32,000 8.000 216,000 288,000 Additional information: (a) The market value of of Samsam and Baste shares are ?80 and 232, respectively SamSam acquires Baste for Php80,000 cash, a transfer of plant and equipment it owns which is currently worth at Php120,000 and 4,800 issuance of shares of stock in exchange for all the net assets of Baste. Additional shares shall be contingently issued in January 1, 2017 if Samsam's shares will decrease by at least Php5 per share. Additional shares shall be issued in order to compensate any loss, exceeding Php5 per share that is suffered by Baste from the decrease in fair value of Samsam's shares. The probability that the shares will decrease to Php48 is 40%, while it is forecasted to decrease to Php40 with a 60% chance of occurence. The discount rate of 4% is to be used. Accounting and legal fees associated with the acquisitions amounted to Php8,000. Baste has an in-process research and development amounting to Php80,000 which has not yet reached technological feasibility. Remider: Avoid rounding off in the computation of PV factor, decimals matter. SamSam Company and Baste Company agreed to a combination on January 1, 2015. On the date of combination , the companies reported the following data Cash and recenables Inventory Land Plant and equipment Less: Accumulated depreciation Sotal Assets SamSam Book Value Fair Value 144.000 144.000 160.000 240.000 160.000 224,000 640,000 (240,000) 480.000 864,000 1,088,000 Baste Company Book Value Fair Value 32000 32,000 48.000 67200 16.000 24.000 320.000 (128,000) 224,000 288,000 347200 128,000 32000 32.000 128,000 320,000 Current liabilities Ordinary shares, 232 par Ordinary shares, 78 par Share premium Accumulated profits Total liabilities and shareholders equity 32,000 384,000 864,000 32,000 8.000 216,000 288,000 Additional information: (a) The market value of of Samsam and Baste shares are ?80 and 232, respectively SamSam acquires Baste for Php80,000 cash, a transfer of plant and equipment it owns which is currently worth at Php120,000 and 4,800 issuance of shares of stock in exchange for all the net assets of Baste. Additional shares shall be contingently issued in January 1, 2017 if Samsam's shares will decrease by at least Php5 per share. Additional shares shall be issued in order to compensate any loss, exceeding Php5 per share that is suffered by Baste from the decrease in fair value of Samsam's shares. The probability that the shares will decrease to Php48 is 40%, while it is forecasted to decrease to Php40 with a 60% chance of occurence. The discount rate of 4% is to be used. Accounting and legal fees associated with the acquisitions amounted to Php8,000. Baste has an in-process research and development amounting to Php80,000 which has not yet reached technological feasibility. Remider: Avoid rounding off in the computation of PV factor, decimals matter