Prior to being united in a business combination, AA, Inc.

, and WS Corporation had the following

stockholders’ equity figures: AA WS Ordinary Shares, (P1 par value)………………… P 180,000 P
45,000 Share Premium…................…………………….. 90,000 20,000 Retained
earnings……………………………… 300,000 110,000 AA issues 51,000 new shares of its ordinary
shares valued at P3 per share for all of the outstanding stock of WS. Assume that AA acquires WS
immediately afterward. What are the Share Premium and Retained Earnings, respectively?

Group of answer choices

P104,000 and P300,000

P212,000 and P410,000

P110,000 and P410,000

P192,000 and P300,000

Atkins issues 51,000 new shares of its common stock valued at $3 per share for all of the outstanding
stock of Waterson. Immediately afterward, what are consolidated Additional Paid-In Capital and
Retained Earnings, respectively?

a. $104,000 and $300,000.

b. $110,000 and $410,000.

c. $192,000 and $300,000.

d. $212,000 and $410,000.

14. C

On January 1, 20x1, COLLOQUY Co. acquired all of the identifiable assets and assumed all of the
liabilities of CONVERSATION, Inc. by issuing its own ordinary shares. Information at acquisition
date is shown below: COLLOQUY Co. CONVERSATION, Co. Combined entity (carrying amounts)
(fair values) Identifiable assets 9,600,000 6,400,000 16,000,000 Goodwill - - ? Total assets 9,600,000
6,400,000 ? Liabilities 2,800,000 3,600,000 6,400,000 Share capital 2,400,000 1,200,000 2,800,000
Share premium 1,200,000 1,000,000 4,800,000 Retained earnings 3,200,000 600,000 ? Total
liabilities & equity 9,600,000 6,400,000 ? Additional information: · COLLOQUY’s share capital
consists of 60,000 ordinary shares with par value of P40 per share. · CONVERSATION’s share
capital consists of 3,000 ordinary shares with par value of P400 per share. How much goodwill was
recognized on acquisition date?

Group of answer choices

1
P1,280,000

P1,200,000

P1,080,000

P980,000

On January 1, 20x1, COLLOQUY Co. acquired all of the identifiable assets and assumed all of the
liabilities of CONVERSATION, Inc. by issuing its own ordinary shares. Information at acquisition
date is shown below: COLLOQUY Co. CONVERSATION, Co. Combined entity (carrying amounts)
(fair values) Identifiable assets 9,600,000 6,400,000 16,000,000 Goodwill - - ? Total assets 9,600,000
6,400,000 ? Liabilities 2,800,000 3,600,000 6,400,000 Share capital 2,400,000 1,200,000 2,800,000
Share premium 1,200,000 1,000,000 4,800,000 Retained earnings 3,200,000 600,000 ? Total
liabilities & equity 9,600,000 6,400,000 ? Additional information: · COLLOQUY’s share capital
consists of 60,000 ordinary shares with par value of P40 per share. · CONVERSATION’s share
capital consists of 3,000 ordinary shares with par value of P400 per share. What is the retained
earnings of the combined entity immediately after the business combination?

Group of answer choices

P3,320,000

P3,200,000

P3,280,000

P3,120,000