2. Mashiho Company acquires 18% of Junkyu Company's stock for P700,000 cash and carries the investment as a financial asset. A few months later, Mashiho purchases another 70% percent of Junkyu Company's stock for P2,520.000. At the said date, Junkyu Company reports identifiable assets with a book value of P3,900.000 and a fair value of P5,250,000. Its liabilities have a book and fair values of P1,500.000 and 1,900,000, respectively. Required: 1. Determine the amount of goodwill or gain on bargain purchase that should be recognized if the non- controlling interest is measured on a proportionate basis. 2. Determine the amount of goodwill or gain on bargain purchase that should be recognized if the non- controlling interest is measured on a fair value basis.
2. Mashiho Company acquires 18% of Junkyu Company's stock for P700,000 cash and carries the investment as a financial asset. A few months later, Mashiho purchases another 70% percent of Junkyu Company's stock for P2,520.000. At the said date, Junkyu Company reports identifiable assets with a book value of P3,900.000 and a fair value of P5,250,000. Its liabilities have a book and fair values of P1,500.000 and 1,900,000, respectively. Required: 1. Determine the amount of goodwill or gain on bargain purchase that should be recognized if the non- controlling interest is measured on a proportionate basis. 2. Determine the amount of goodwill or gain on bargain purchase that should be recognized if the non- controlling interest is measured on a fair value basis.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 18E
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Transcribed Image Text:2. Mashiho Company acquires 18% of Junkyu Company's stock for P700,000 cash and carries the investment
as a financial asset. A few months later, Mashiho purchases another 70% percent of Junkyu Company's
stock for P2,520.000. At the said date, Junkyu Company reports identifiable assets with a book value of
P3,900.000 and a fair value of P5,250,000. Its liabilities have a book and fair values of P1,500.000 and
1,900,000, respectively.
Required:
1. Determine the amount of goodwill or gain on bargain purchase that should be recognized if the non-
controlling interest is measured on a proportionate basis.
2. Determine the amount of goodwill or gain on bargain purchase that should be recognized if the non-
controlling interest is measured on a fair value basis.
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