Acquiree Inc. has 100,000 shares of P2 par value stock outstanding. Acquirer Co. purchased 30,000 shares of Acquiree on January 1, 2018 for P120,000 when Acquiree’s net assets had a fair value of P350,000. On July 1, 2020, Acquirer agreed to buy an additional 60,000 shares of Acquiree for P6 per share. Although Acquiree’s shares were selling at P5 per share, Acquirer forecasted that obtaining control of Acquiree would produce significant revenue synergies to justify the premium price paid. If Acquiree’s net identifiable assets had a fair value of P400,000 on July 1, 2020, how much partial goodwill should Acquirer report?
Acquiree Inc. has 100,000 shares of P2 par value stock outstanding. Acquirer Co. purchased 30,000 shares of Acquiree on January 1, 2018 for P120,000 when Acquiree’s net assets had a fair value of P350,000. On July 1, 2020, Acquirer agreed to buy an additional 60,000 shares of Acquiree for P6 per share. Although Acquiree’s shares were selling at P5 per share, Acquirer forecasted that obtaining control of Acquiree would produce significant revenue synergies to justify the premium price paid. If Acquiree’s net identifiable assets had a fair value of P400,000 on July 1, 2020, how much partial goodwill should Acquirer report?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 24E
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Acquiree Inc. has 100,000 shares of P2 par value stock outstanding. Acquirer Co. purchased 30,000 shares of Acquiree on January 1, 2018 for P120,000 when Acquiree’s net assets had a fair value of P350,000. On July 1, 2020, Acquirer agreed to buy an additional 60,000 shares of Acquiree for P6 per share. Although Acquiree’s shares were selling at P5 per share, Acquirer
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