2.

Consideration Transferred B

Cash 5,000,000.00
Stocks 2,000,000.00
Earn-out agreement 694,440.00
Total Consideration T. 7,694,440.00 /

3. Goodwill B

FV of CT
FV of Net Assets acquired
Total Assets
Current Assets 2,100,000.00
PPE 3,000,000.00
Identifiable Intangible Asset 7,000,000.00 12,100,000.00
Unrecorded Identifiable IA
Advanced tech 170,000.00
warranty - 280,000.00
non competition 70,000.00
customer contract 50,000.00 10,000.00
Total Liabilities
Current liabilities 1,000,000.00
Long-term debt 5,800,000.00 6,800,000.00
Goodwill (Bargain Purchase) 5,310,000.00

4 Total assets after acquisition D or B

DJ Builders
Current Assets 7,000,000.00 2,100,000.00
PPE 55,000,000.00 3,000,000.00
Identifiable Intangible Asset 400,000.00 7,000,000.00
Advanced tech 170,000.00
warranty - 280,000.00
non competition 70,000.00
customer contract 50,000.00
Goodwill 2,384,440.00
TOTAL 62,400,000.00 14,494,440.00

5. Total Liabilities B

36,500,000.00
694,440.00
6,800,000.00
280,000.00
TOTAL
6. Stockholders equity B
Share Capital 200,000.00
500,000.00 700,000.00
Share Premium 22,000,000.00
1,500,000.00
- 200,000.00 23,300,000.00
Retained Earnings 4,000,000.00
- 400,000.00 3,600,000.00
Accumulated OCI 100,000.00 100,000.00
Treasury Stock - 400,000.00 - 400,000.00
TOTAL SHE

7. Consideration Transferred A

Cash 85,000,000.00
Stocks 5,000,000.00
Earnings Contingency 2,000,000.00
TOTAL 92,000,000.00

8.Goodwill
A
FV of CT
FV of Net Assets acquired
Total Assets
Current Assets 800,000.00
PPE 10,000,000.00
Patents and trademarks 20,000,000.00 30,800,000.00
Unrecorded Identifiable IA
Bottler's franchise rights 5,000,000.00
Signed customer's contracts 1,000,000.00
Internet domain names 3,000,000.00
Customer order backlogs 1,500,000.00
Well-publicized internet DN 2,000,000.00
Trade dress 1,200,000.00
Trade secrets 400,000.00 16,400,000.00
Total Liabilities
Current liabilities - 400,000.00
Long-term debt - 41,000,000.00 - 41,400,000.00
Goodwill (Bargain Purchase)

9. Total Assets A

PPE
Patents and Trademarks

Unrecorded Identifiable IA 16,400,000.00

TOTAL 16,400,000.00

10. Total Liabilities C

Current Liab DPSG 1,000,000.00

Current Liab T.W 400,000.00
L.L DPSG 10,000,000.00
L.L T.W 41,000,000.00
Earnings Contingency 2,000,000.00
TOTAL 54,400,000.00

11. Share Capital C

DPSG 77,200,000.00
Merger 50,000.00
TOTAL 77,250,000.00

12. Share Premium B

DPSG 36,200,000.00
Merger 4,950,000.00
CITR - 600,000.00
TOTAL 40,550,000.00

13. Total SHE A

Share Capital 77,250,000.00

Share Premium 40,550,000.00
Retained Earnings 8,800,000.00
Accumulated OCI 5,500,000.00
Treasury Stock - 700,000.00
TOTAL 131,400,000.00

14. Goodwill C

FV of CT
Stocks 979,200.00
Contingent Consideration 234,000.00
FV OF Net Assets - 835,740.00
Goodwill 377,460.00

15. Expenses *

Legal fees 42,720.00

Broker's fee 28,320.00
Accountant's fee 96,000.00
Other direct cost 90,000.00
Gen. and allocated Expenses 51,600.00
TOTAL 308,640.00

16. Profit or Loss *

17. Bargain Purchase D

FV of CT 500,000.00
FV of NA
AR 180,000.00
Inventory 400,000.00
Land 50,000.00
Buildings 60,000.00
Equipment 70,000.00
Current Liabilities - 70,000.00
Long-term debt - 160,000.00
Patent 20,000.00 - 550,000.00
Bargain Purchase - 50,000.00

18. Goodwill (Bargain Purchase) C

FV of CT 4,800,000.00
FV of NA
Assets 7,680,000.00
Liabilities - 4,320,000.00 - 3,360,000.00
Goodwill 1,440,000.00

19. Profit or Loss *

Acquisition-related expenses
Legal fees 48,000.00
Diligence cost 480,000.00
Gen. and Admin. Cost 96,000.00
TOTAL 624,000.00

20. Goodwill C

FV of CT 4,800,000.00
FV of NA - 3,360,000.00
Goodwill 1,440,000.00
21-22 Consideration Transferred & Goodwill A; B

FV of CT 2,240,000.00
FV of NA
Current Assets 920,000.00
Plant asset 2,000,000.00
Liabilities - 1,200,000.00 - 1,720,000.00
GOODWILL 520,000.00

23. Goodwill D

FV of CT
Common Stocks 750,000.00
Preferred Stock 1,500,000.00
Cash 50,000.00 2,300,000.00
FV of NA
Accounts Receivable 198,000.00
Inventory 330,000.00
Land 550,000.00
Buildings and equipment 1,144,000.00
Current Liabilities - 275,000.00
Bonds Payable - 495,000.00 - 1,452,000.00
GOODWILL 848,000.00

24A. Goodwill or Gain on Bargain Purchase (in millions) C

FV of CT 8,000.00
FV of NA
Cash 1,400.00
Receivables 650.00
Investments 1,000.00
Maintenance Supplies 400.00
Flight equipment 12,000.00
International routes 500.00
Leases 800.00
Current Liabilities - 3,200.00
Long-term debt - 6,000.00 - 7,550.00
GOODWILL (Gain on Bargain Purchase) 450.00

24B. Gain on Contingent Consideration C

FV of CT
Cash 2,600,000.00
Earnings Contingency 200,000.00 2,800,000.00
FV of NA
Total Assets 3,440,000.00
Total Libilities - 870,000.00 - 2,570,000.00
GOODWILL 230,000.00

Estimated Earnings Contingency 200,000.00

 Gain on E.C 200,000.00

25-26. FV of NA; Goodwill (Gain on BP) B:B

FV of CT 4,800,000.00
FV of NA
Assets 7,680,000.00
Liabilities - 4,320,000.00 - 3,360,000.00
Goodwill (Gain on BP) 1,440,000.00

27. Goodwill D

FV of CT
Cash 960,000.00
Liability 3,490,909.06
Land 1,440,000.00 5,890,909.06
FV of NA
Assets 7,680,000.00
Liability - 4,320,000.00 - 3,360,000.00
Goodwill 2,530,909.06

28. Total Assets C

Cash 64,000.00
Receivables 213,000.00
Trademarks 625,000.00
Record music catalog 1,020,000.00
Equipment 425,000.00
Research and Development 200,000.00
Goodwill 27,000.00
Total Assets 2,574,000.00

29. Total Liabilities D

Accounts Payable 144,000.00

Notes payable 415,000.00
Total Liabilities 559,000.00

30. Share Capital 460,000.00 D

31. Share Premium 695,000.00 C

32. Retained Earnings 860,000.00 C

24.00
 Unanswered:
15.00
16.00
19.00

Journal entry:
7,694,440.00
Current Assets
PPE
Identifiable Intangible Asset
Advanced tech
warranty
non competition
customer contract
Goodwill

- 5,310,000.00
2,384,440.00

Acquisition-related Expenses

3,500,000.00
58,000,000.00 Share Premium
7,400,000.00
170,000.00
- 280,000.00
70,000.00
50,000.00
2,384,440.00
71,294,440.00

44,274,440.00
 27,300,000.00

92,000,000.00 Current Assets

PPE
Patents and trademarks
Bottler's franchise rights
Signed customer's contracts
Internet domain names
Customer order backlogs
Well-publicized internet DN
Trade dress
Trade secrets
Goowill

- 5,800,000.00
86,200,000.00
Acquisition-related expenses

Share Premium
### Goodwill 12,000.00
Est. Warranty Liability

Goodwill 2,542,909.06

Cash
Receivables
Trademarks
Record music catalog
Equipment
Research and Development
Goodwill

Share Premium-CITR
 2,100,000.00
3,000,000.00
7,000,000.00
170,000.00
- 280,000.00
70,000.00
50,000.00
2,384,440.00
Current liabilities 1,000,000.00
Long-term debt 5,800,000.00
Cash 5,000,000.00
Share Capital 500,000.00
Share Premium 1,500,000.00
Earn-out agreement 694,440.00

400,000.00
Cash 400,000.00

200,000.00
Cash 200,000.00
 800,000.00
10,000,000.00
20,000,000.00
5,000,000.00
1,000,000.00
3,000,000.00
1,500,000.00
2,000,000.00
1,200,000.00
400,000.00
86,200,000.00
Current liabilities 400,000.00
Long-term debt 41,000,000.00
Cash 85,000,000.00
Share Capital 50,000.00
Share Premium 4,950,000.00
Earnings Contingency 2,000,000.00

12,000,000.00
Cash 12,000,000.00

600,000.00
Cash 600,000.00
 12,000.00

29,000.00 829,000.00
63,000.00 829,000.00
225,000.00
180,000.00
105,000.00
200,000.00
27,000.00
Accounts Payable 34,000.00
Notes payable 45,000.00
Share Capital 60,000.00
Share Premium 690,000.00

25,000.00
Cash 25,000.00
Problem 1
Statutory Merger
FV of Consideration Transferred
Stocks issued 800,000.00
Stock price contingency 200,000.00 1,000,000.00
FV of Net assets
Total assets 1,160,000.00
Liabilities - 450,000.00 - 710,000.00
Goodwill 290,000.00

Stock Acquisition
FV of Consideration 1,000,000.00
Less: Book Value of SHE (Sons)
Common stock 50,000.00
SP 170,000.00
Retained Earnings 400,000.00 - 620,000.00
Allocated Excess 380,000.00
OVA/UVA/OVL/UVL
Current Assets - 30,000.00
Plant assets 70,000.00
Liabilities 50,000.00 - 90,000.00
Goodwill 290,000.00

Problem III
Situation 1
FV of Consideration Transferred 40,000,000.00
FV of Net assets
CA 1,500,000.00
Investments 500,000.00
Land 6,000,000.00
Bldg. 16,000,000.00
Equip. 2,000,000.00
IA 5,000,000.00
Current Liabs - 1,500,000.00
Long-term Liabs - 12,000,000.00 - 17,500,000.00
Goodwill 22,500,000.00

Total Assets after merger

CA 5,400,000.00
Investments 1,500,000.00
Land 16,000,000.00
Bldg. 56,000,000.00
Equip. 27,000,000.00
IA 5,000,000.00
Goodwill 22,500,000.00
TOTAL 133,400,000.00 /

Total Liabilities after merger

Current Liabs 5,500,000.00
 Long-term Liabs 32,000,000.00
TOTAL 37,500,000.00 /

Share Premium after merger 74,900,000.00 /

Retained Earnings 12,000,000.00 /

Stockholders' Equity after merger 95,900,000.00 /

Situation 2
FV of Consideration Transferred
Stocks 9,000,000.00
Cash 500,000.00
Earnout agreement 200,000.00
Stock price contingency 300,000.00 10,000,000.00
FV of Net assets - 17,500,000.00
Bargain Purchase 7,500,000.00

Total Assets after merger

CA 5,460,000.00
Investments 1,500,000.00
Land 16,000,000.00
Bldg. 56,000,000.00
Equip. 27,000,000.00
IA 5,000,000.00
TOTAL 110,960,000.00

Total Liabilities after merger

Current Liabs 5,500,000.00
Long-term Liabs 32,000,000.00
Earnout Agreement 200,000.00
TOTAL 37,700,000.00

Share Premium 48,210,000.00

Retained Earnings 11,650,000.00

Shareholders' Equity 65,760,000.00

Situation 3
FV of Consideration Transferred
Stocks 10,000,000.00
Earnings Contingency 8,000,000.00 18,000,000.00
Less: Book value of Sicle's SHE
Common stock 1,000,000.00
Share Premium 20,000,000.00
Retained earnings 10,000,000.00 - 31,000,000.00
Allocated Excess - 13,000,000.00
OVA/UVA/OVL/UVL
Decrease in CA - 500,000.00
Increase in Land 1,000,000.00
Decrease in Building - 9,000,000.00
Decrease in Equipment - 8,000,000.00
Increase in Long-term Liabilities - 2,000,000.00 - 18,500,000.00
Bargain Purchase - 31,500,000.00

Problem 5

Requirement 1
FV of Consideration Transferred
Stocks 750,000.00
Notes Payable 180,000.00
Contingent Liability 36,000.00 966,000.00
FV of Net assets
Total assets 1,104,000.00
Total liabilities - 240,000.00 - 864,000.00
Goodwill 102,000.00

Pure Corporation
Balance Sheet
December 31, 20x4
Assets
Cash 162,000.00
Receivables 144,000.00
Inventories 360,000.00
Land 348,000.00
Buildings 840,000.00
Equipment 732,000.00
Research & Development 60,000.00
Goodwill 102,000.00
Total Assets 2,748,000.00

Liabilities and Stockholders' Equity

Liabilities
Accounts Payable 288,000.00
Other Liabs 408,000.00
Notes Payable 180,000.00
Estimated liability for contingent consideration 36,000.00
Total Liabilities 912,000.00
Stockholders' Equity
Common stock, P10 par 1,020,000.00
Share Premium 657,600.00
Retained earnings 158,400.00
Total Stockholders' Equity 1,836,000.00
Total Liabilities and Equities 2,748,000.00

Requirement 2

Building 24,000.00
Goodwill 24,000.00
Goodwill 78,000.00

Requirement 3

A. Goodwill 24,000.00
Est. Contingent Liab 24,000.00

B. Goodwill 126,000.00

C. Est. Contingent Liability 12,000.00

Goodwill 12,000.00

Goodwill 114,000.00

Loss on increase in Est. Contingent Liability 30,000.00

Est. Contingent Liab. 30,000.00

Goodwill 114,000.00

Est. Contingent Liability 78,000.00

Loss on Contingent Liability 42,000.00
Cash 120,000.00

Goodwill 114,000.00

Requirement 4
FV of Consideration Transferred
Stocks 750,000.00
Notes Payable 180,000.00
Contingent Liability 40,384.61 970,384.61
FV of Net assets
Total assets 1,104,000.00
Total liabilities - 240,000.00 - 864,000.00
Goodwill ₱ 106,384.61

Estimated Contingent Liability 40,384.61

Goodwill 40,384.61

Goodwill 66,000.00

Est. Contingent Liability 42,000.00

Loss on Est. Contingent Consideration 60,000.00
Cash 102,000.00

Requirement 5

FV of Consideration Transferred
Stocks 750,000.00
Notes Payable 180,000.00
 Contingent Liability 36,000.00
Stock contingency 18,000.00 984,000.00
FV of Net assets
Total assets 1,104,000.00
Total liabilities - 240,000.00 - 864,000.00
Goodwill 120,000.00

Share Premium- Stock Contingency 15,000.00

Share Capital 12,000.00
Share Premium 3,000.00

Requirement 6

Share Premium 60,000.00

Share Capital 60,000.00

Requirement 7

Share Premium 75,000.00

Share Capital 75,000.00

Requirement 8

FV of Consideration Transferred
Stocks 750,000.00
Notes Payable 180,000.00
Stock contingency 92,307.69 1,022,307.69
FV of Net assets
Total assets 1,104,000.00
Total liabilities - 240,000.00 - 864,000.00
Goodwill 158,307.69

Share Premium- Stock Contingency 92,307.69

Share Capital 75,000.00
Share Premium 17,307.69
 Current assets 350,000.00
Plant assets 810,000.00
Goodwill 290,000.00
Liabilities 450,000.00
Share Capital 100,000.00
Share Premium-Issuance 700,000.00
Share Premium- SC 200,000.00

Current Assets 1,500,000.00

Investments 500,000.00
Land 6,000,000.00
Bldg. 16,000,000.00
Equipment 2,000,000.00
IA 5,000,000.00
Goodwill 22,500,000.00
Current Liabs 1,500,000.00
Long-term Liabs 12,000,000.00
Share Capital 4,000,000.00
/ SP- Issuance 36,000,000.00

Share Premium- CITR 1,100,000.00

Cash 1,100,000.00
Current Assets 1,500,000.00
Investments 500,000.00
Land 6,000,000.00
Bldg. 16,000,000.00
Equipment 2,000,000.00
IA 5,000,000.00
Current Liabs 1,500,000.00
Long-term Liabs 12,000,000.00
Cash 500,000.00
Estimated Earnout C. 200,000.00
SP- Stock Price 300,000.00
Share Capital 900,000.00
SP- Issuance 8,100,000.00
Gain on Bargain Purchase 7,500,000.00

SP- CITR 190,000.00

Cash 190,000.00

Acquisition-related Exp. 350,000.00

Cash 350,000.00

Situation 4

Est. Earnings Contingency 200,000.00

Gain on Bargain Purchase 200,000.00

Est. Earnings Contingency 200,000.00

Gain on decrease of liabs 200,000.00
Cash 24,000.00
Receivables 48,000.00
Inventories 72,000.00
Land 240,000.00
Buildings 360,000.00
Equipment 300,000.00
Research & Development 60,000.00
Goodwill 102,000.00
AP 72,000.00
Other Liabs 168,000.00
Share Capital 300,000.00
Share Premium 450,000.00
Notes payable 180,000.00
Est. Contingent Liability 36,000.00

Acquisition-related exp. 105,600.00

Cash 105,600.00

Share Premium- CITR 32,400.00

Cash 32,400.00
Cash 24,000.00
Receivables 48,000.00
Inventories 72,000.00
Land 240,000.00
Buildings 360,000.00
Equipment 300,000.00
Research & Development 60,000.00
Goodwill 106,384.61
AP 72,000.00
Other Liabs 168,000.00
Share Capital 300,000.00
Share Premium 450,000.00
Notes payable 180,000.00
Est. Contingent Liability 40,384.61

Cash 24,000.00
Receivables 48,000.00
Inventories 72,000.00
Land 240,000.00
Buildings 360,000.00
Equipment 300,000.00
Research & Development 60,000.00
Goodwill 120,000.00
AP 72,000.00
Other Liabs 168,000.00
Share Capital 300,000.00
Share Premium 450,000.00
Notes payable 180,000.00
Est. Contingent Liability 36,000.00
SP- Stock Contingency 18,000.00

7500
 1,450,000.00
1,450,000.00

53,500,000.00
53,500,000.00
31,000,000.00
31,000,000.00
1,206,000.00
1,206,000.00
1,210,384.61
1,210,384.61

1,224,000.00
1,224,000.00