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ABC Corp. XYZ Corp. Book Value Fair Value Book Value Fair Value

The document outlines costs ABC pays at the time of a merger, including a finder's fee of P10,000, accounting fees of P20,000, legal fees of P35,000, costs of printing stock certificates of P12,000, and indirect costs such as overhead and salaries of P23,000. It also provides a comparison of the book value and fair value of assets and liabilities for ABC Corp and XYZ Corp.

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Jean Kathyrine Chiong
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31 views2 pages

ABC Corp. XYZ Corp. Book Value Fair Value Book Value Fair Value

The document outlines costs ABC pays at the time of a merger, including a finder's fee of P10,000, accounting fees of P20,000, legal fees of P35,000, costs of printing stock certificates of P12,000, and indirect costs such as overhead and salaries of P23,000. It also provides a comparison of the book value and fair value of assets and liabilities for ABC Corp and XYZ Corp.

Uploaded by

Jean Kathyrine Chiong
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

In addition, ABC pays the following at the time of merger:

 Finder's fee - P10,000


 Accounting Fees - P20,000
 Legal fees to arrange the business combination - P35,000
 Cost of printing and issuing stock certificates - P12,000
 Indirect costs of combining, including allocated overhead and executive salaries - P23,000

ABC Corp. XYZ Corp.

Book Value Fair Value Book Value Fair Value

Cash P230,000 P230,000 P 20,000 P 20,000

Receivables - net 80,000 80,000 40,000 40,000

Inventories 240,000 300,000 100,000 60,000

Land 90,000 200,000 60,000 200,000

Buildings - net (10-year life)  400,000 600,000 200,000 300,000

Equipment - net (5 Year life) 360,000 490,000 180,000 250,000

In-process research and Development .........0....... ..........0........ ...........0........... 50,000

P
Total Assets P 1,900,000 P 600,000
1,400,000

Accounts Payable P180,000 P180,000 P60,000 P60,000

Other liabilities 200,000 180,000 120,000 140,000

Common stock, P10 par 600,000 200,000

Additional paid-in capital 200,000 160,000

Retained earnings 220,000 60,000

P
Total Liabilities and Equities P 600,000
1,400,000

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