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  • Stock Acquisition - Date of Acquisition

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    kat kale
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    Priyanka Company acquired 80% of Sasha Velour Company by issuing 32,000 shares of its common stock. The fair value of the shares issued was P1,600,000. Priyanka also paid P200,000 in professional fees. The fair value of the non-controlling interest was P340,000. Goodwill resulting from the acquisition was P1,460,000. Priyanka recorded the acquisition by debiting goodwill and investments in Sasha Velour for the consideration transferred, and crediting common stock and additional paid-in capital for the value of shares issued. A consolidated statement of financial position was prepared that combined the accounts of Priyanka and Sasha Velour.

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    Priyanka Company acquired 80% of Sasha Velour Company by issuing 32,000 shares of its common stock. The fair value of the shares issued was P1,600,000. Priyanka also paid P200,000 in professional fees. The fair value of the non-controlling interest was P340,000. Goodwill resulting from the acquisition was P1,460,000. Priyanka recorded the acquisition by debiting goodwill and investments in Sasha Velour for the consideration transferred, and crediting common stock and additional paid-in capital for the value of shares issued. A consolidated statement of financial position was prepared that combined the accounts of Priyanka and Sasha Velour.

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    25 views2 pages

    Stock Acquisition - Date of Acquisition

    Uploaded by

    kat kale
    Priyanka Company acquired 80% of Sasha Velour Company by issuing 32,000 shares of its common stock. The fair value of the shares issued was P1,600,000. Priyanka also paid P200,000 in professional fees. The fair value of the non-controlling interest was P340,000. Goodwill resulting from the acquisition was P1,460,000. Priyanka recorded the acquisition by debiting goodwill and investments in Sasha Velour for the consideration transferred, and crediting common stock and additional paid-in capital for the value of shares issued. A consolidated statement of financial position was prepared that combined the accounts of Priyanka and Sasha Velour.

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    © All Rights Reserved
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    Case:

    Below are the Statements of Financial Position of Priyanka Company and Sasha Velour
    Company as of December 1, 2019:

     
    Priyanka issued 32,000 shares of its P10 par value common stock for 80% of the
    outstanding shares of Sasha Velour. The fair value of Priyanka's stock is P50 and the fair
    value of the 20% NCI is assessed to be P340,000. Priyanka also pays P200,000
    professional fees to accomplish the acquisition.
     
    Requirement: 
    1. What is the amount of goodwill resulting from the acquisition?
    2.  Prepare the journal entries for the acquirer.
    3. Prepare a consolidation working paper on the date of acquisition
    4. Prepare a consolidated statement of financial position on the date of acquisition
     
    Upload your solutions and journal entries in good form.  You may upload a picture of
    your handwritten solution, a screenshot of your digital work, or the excel file of your
    work.

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