Entity A acquired 80% of the outstanding voting stock of Entity B for P4,500,000 on March 1, 2019 and paid P50,000 for direct acquisition related costs. On this date, Entity B’s stockholders’ equity is composed of: Share capital- P2,000,000 Share premium- 1,200,000 Retained earnings- 1,600,000 The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. How much is the fair value of the net assets of Entity B?
Entity A acquired 80% of the outstanding voting stock of Entity B for P4,500,000 on March 1, 2019 and paid P50,000 for direct acquisition related costs. On this date, Entity B’s stockholders’ equity is composed of: Share capital- P2,000,000 Share premium- 1,200,000 Retained earnings- 1,600,000 The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. How much is the fair value of the net assets of Entity B?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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Entity A acquired 80% of the outstanding voting stock of Entity B for P4,500,000 on March 1, 2019 and paid P50,000 for direct acquisition related costs. On this date, Entity B’s
Share capital- P2,000,000
Share premium- 1,200,000
The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to
How much is the fair value of the net assets of Entity B?
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