Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

P Company issued 5,000 shares of its common stock, valued at P200,000 to the former shareholders of S Company two years after S company was

P Company issued 5,000 shares of its common stock, valued at P200,000 to the former shareholders of S Company two years after S company was acquired in an all-stock transaction. The additional shares were issued because P Company agreed to issue additional shares of common stock if the average post combination earnings over the next two years exceeded P500,000. P Company will treat the issuance of the additional shares as a (decrease in)

Group of answer choices

-Paid-in capital

-Retained earnings

-Goodwill

-Non-current liabilities of S Company assumed by P

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

Fundamentals of Cost Accounting

Authors: William N. Lanen, Shannon Anderson, Michael W Maher

6th edition

1259969479, 1259565408, 978-1259969478

More Books

Students also viewed these Accounting questions

Question

Does this value make me feel good about myself?

Answered: 1 week ago