Question
V Company is engaged in a variety of businesses around south. The CEO thought of expanding and the way to do that is to buy
V Company is engaged in a variety of businesses around south. The CEO thought of expanding and the way to do that is to buy a portion or a whole entity that competes with his. The below data pertains to JK Enterprises balance sheet together with V before acquisition and any other adjustments:
JK Enterprise | V Company | |||
Fair | Book | Fair | Book | |
Cash | 45,000 | 45,000 | 582,200 | 582,200 |
Accounts receivable | 48,000 | 43,000 | 19,000 | 190,000 |
Inventories | 65,000 | 55,000 | 74,000 | 71,000 |
Prepaid expenses | 42,000 | 38,000 | 40,000 | 35,000 |
Notes receivable | 585,000 | 585,000 | 685,000 | 685,000 |
Accounts payable | 31,000 | 31,000 | 60,000 | 60,000 |
Notes payable | 280,000 | 280,000 | 150,000 | 150,000 |
Common stock | 300,000 | 750,000 | ||
Additional paid-in-capital | 65,000 | 430,200 | ||
Retained earnings | 90,000 | 173,000 |
On January 1, 2021, V decided to acquire all but fifteen percent of JK's equities for P520,200. Notes receivable of V was negotiated and dealt on August 15, 2020 and payable on August 15, 2023 at 12% interest rate while the same account on the hands of JK bears the same interest rate but only executed the transaction three and a half months immediately preceding the acquisition date and its due date is after 3 years from that date. Same nature of transactions and agreements applied to respective notes payables including their commencement date and settlement date except that V's is at 14%. There is an existing arrangement that total interests will be paid or received in full together with the settlement of the respective Note receivable/payable. (Amounts must be round to TWO decimal places)
Question: 1. How much is the subsidiarys real and original value of the equity being bought by the parent?
2. In connection to V and JK problem, should there be no increase in the valuation of the assets, how much will be the Goodwill?
3. In connection to V and JK problem, how much is the consolidated Total Current Assets and Total Non-Current Assets?
4. In connection to V and JK problem, How much is the Total Shareholders Equity other than Non-Controlling Interest?
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