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assuming 2 companies are about 2 merge into new one Named U.S company
the first is new york company and it's net assets = 1650000 - 450000 = 1200000
the second is Washington company and it's net assets = 1150000 - 250000 = 900000
Then , The new U.s company released 37000 of shares , share value = 60
and the cost of combination is 100000 ( 40000 direct , 60000 indirect )
Now , I have to determine which one is the combiner and which one is the combine e
The book is telling , the company owns more shares is the combiner
and the company owns less shares is the combine e
my professor said i have to use this equation to determine the number of shares for each company = fair value of net assets + goodwill / share value (1)
And here's the problem , i can calculate the full goodwill for the 2 companies as following
the value of released shares = 60*37000 = 2220000
-
fair value of net assets for the two companies = 1200000 + 900000 = 2100000
full goodwill = 2220000-2100000 = 120000
the problem is that i can't determine the goodwill for each company
the book saying , it's 90000 for new york company and 30000 for Washington company
but i don't know how ?
calculating the amount of shares for each company as following
by using equation (1)
new york company = 1200000+90000 /60 = 21500 and it's the combiner company
Washington company = 900000+30000 /60 =15500 and it's the combine e company
can someone help me find how the goodwill for each company is calculated ?
sorry for my English if it's bad , and sorry for much talking i did
thanks
the first is new york company and it's net assets = 1650000 - 450000 = 1200000
the second is Washington company and it's net assets = 1150000 - 250000 = 900000
Then , The new U.s company released 37000 of shares , share value = 60
and the cost of combination is 100000 ( 40000 direct , 60000 indirect )
Now , I have to determine which one is the combiner and which one is the combine e
The book is telling , the company owns more shares is the combiner
and the company owns less shares is the combine e
my professor said i have to use this equation to determine the number of shares for each company = fair value of net assets + goodwill / share value (1)
And here's the problem , i can calculate the full goodwill for the 2 companies as following
the value of released shares = 60*37000 = 2220000
-
fair value of net assets for the two companies = 1200000 + 900000 = 2100000
full goodwill = 2220000-2100000 = 120000
the problem is that i can't determine the goodwill for each company
the book saying , it's 90000 for new york company and 30000 for Washington company
but i don't know how ?
calculating the amount of shares for each company as following
by using equation (1)
new york company = 1200000+90000 /60 = 21500 and it's the combiner company
Washington company = 900000+30000 /60 =15500 and it's the combine e company
can someone help me find how the goodwill for each company is calculated ?
sorry for my English if it's bad , and sorry for much talking i did
thanks