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  • Profe03 Act#2

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    Red Mariee
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    This document provides information and questions about accounting for business combinations. It includes examples of calculating the number of shares issued in an acquisition based on the fair value transferred and the par value per share. It also includes an example of calculating goodwill by taking the total consideration transferred and subtracting the fair value of net identifiable assets acquired. The key information is how to account for share capital, share premium, non-controlling interests, and goodwill when combining two entities through an acquisition.

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    This document provides information and questions about accounting for business combinations. It includes examples of calculating the number of shares issued in an acquisition based on the fair value transferred and the par value per share. It also includes an example of calculating goodwill by taking the total consideration transferred and subtracting the fair value of net identifiable assets acquired. The key information is how to account for share capital, share premium, non-controlling interests, and goodwill when combining two entities through an acquisition.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    5 views2 pages

    Profe03 Act#2

    Uploaded by

    Red Mariee
    This document provides information and questions about accounting for business combinations. It includes examples of calculating the number of shares issued in an acquisition based on the fair value transferred and the par value per share. It also includes an example of calculating goodwill by taking the total consideration transferred and subtracting the fair value of net identifiable assets acquired. The key information is how to account for share capital, share premium, non-controlling interests, and goodwill when combining two entities through an acquisition.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    PROFE03 ACCOUNTING FOR BUSINESS COMBINATIONS

    ACTIVITY CHAPTER 2

    QUESTION#1
    COJUCTION Co. COMBINMED ENTITY Increase
    (before acquisition) (after acquisition)
    Share Capital 1 200 000 1 400 000 200 000
    Share premium 600 000 2 400 000 1 800 000
    Totals 1 800 000 3 800 00 2 000 000

    CASE #1: 10 000


    SOLUTION
    Fair value transferred 2 000 000
    Divide by: fair value per share 200
    Number of shares issues 10 000

    CASE #2: 20
    SOLUTION
    Increase in share capital account 2 000 000
    Divided by: Number of shares issued 10 000
    Par value per share 20

    CASE #3: 1 400 000


    SOLUTION
    Consideration transferred 2 000 000
    Non-controlling in the acquiree -
    Previously held equity in the acquiree -
    Total 2 000 000
    Fair value of net identifiable assets acquired (1 4000 000)
    (squeeze)
    Goodwill (on given) 600 000
    QUESTION#2
    CASE# 1: 160 000
    Consideration transferred 1 600 000
    Non – controlling interest in the acquiree (2M x 10%) 200 000
    Previously held equity interest in the acquiree 360 000
    360,000 2 160 000
    Total
    360,000
    Total
    Total
    Fair value of net identifiable assets acquired 2 000 000
    Goodwill 160 000

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