Acquirer Company started negotiating for the acquisition of 69,000 outstanding shares of Acquiree Company. The offer was to pay P3,000,000 cash and issue 50,000 shares to the stockholders of Acquiree. Also, Acquirer promised to pay an additional P1,000,000 cash within one year if the net income of Acquiree exceeds P10,000,000. On July 1, 2022, the stockholders of Acquiree accepted the offer. On this date, the fair value of the shares and contingent consideration were P2,550,000 and P750,000 respectively. The stockholders’ equity of Acquirer and Acquiree at the date of acquisition were as follows (see image below). The fair value and book value of Acquiree’s identifiable assets and liabilities were the same except for inventory which was overvalued by P50,000 and Equipment which was overdepreciated by P100,000. Acquirer opted to measure NCI at fair value of P1,850,000. Acquirer also paid the following acquisition related costs: Legal fees - P41,200; Audit fees for SEC registration of share issue - P50,000; Brokerage fee - P22,500; Accountant fee for pre-acquisition audit - P35,000; Printing and registration of stock certificates - P10,000; Other direct costs of acquisition - P16,800; and General administrative costs - P25,000. How much is the Consolidated Retained Earnings?
Acquirer Company started negotiating for the acquisition of 69,000 outstanding shares of Acquiree Company. The offer was to pay P3,000,000 cash and issue 50,000 shares to the stockholders of Acquiree. Also, Acquirer promised to pay an additional P1,000,000 cash within one year if the net income of Acquiree exceeds P10,000,000. On July 1, 2022, the stockholders of Acquiree accepted the offer. On this date, the fair value of the shares and contingent consideration were P2,550,000 and P750,000 respectively. The
The fair value and book value of Acquiree’s identifiable assets and liabilities were the same except for inventory which was overvalued by P50,000 and Equipment which was overdepreciated by P100,000. Acquirer opted to measure NCI at fair value of P1,850,000. Acquirer also paid the following acquisition related costs: Legal fees - P41,200; Audit fees for SEC registration of share issue - P50,000; Brokerage fee - P22,500; Accountant fee for pre-acquisition audit - P35,000; Printing and registration of stock certificates - P10,000; Other direct costs of acquisition - P16,800; and General administrative costs - P25,000.
How much is the Consolidated Retained Earnings?
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