Question
P Corporation issued 120,000 shares of P10 par common stock with a fair value of P2,550,000 for all the outstanding stock of M Company. In
P Corporation issued 120,000 shares of P10 par common stock with a fair value of P2,550,000 for all the outstanding stock of M Company. In addition, P incurred the following costs
Professional fees to arrange the business combinationP27,000
Cost of SEC Registration12,000
Cost of printing and issuing stock certificates3,000
Immediately before the business combination in which M company was dissolved, M's assets and equities were as follows (in thousands)
AccountsBook valueFair value
Current assetsP1,000P1,100
Plant assets1,5002,200
Liabilities300300
Common stock2,000
Retained earnings200
P should recognize expense of
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