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1. On January 1, 20X1, Sit Co. acquired 75% controlling interest in Stand Co. for P1,000,000. On the said
date, the fair value of Stand’s identifiable net assets is P800,000. Sit Co. incurred transaction costs of
P100,000 on the acquisition.
Required: Determine the following:
a. The
on a proportionate basis.
b. The goodwill if Sit Co uses the IFRS for SMEs.
c. The goodwill on December 31, 20X1 under full IFRS and IFRS for SMEs
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- Hanley acquired 85% of the ordinary share capital of Craig on 30 December 20X7 for $80,000. At this date the net assets of Craig were$95,000. NCI is valued using the fair value method and the fair value of the NCI on the acquisition date is $30,000 What goodwill arises on the acquisition?Windell Inc. acquired 85% of the outstanding voting shares of Ralph Corp forP1,500,000. On the acquisition date, Ralph's identifiable assets and liabilities havefair values of P6,000,000 and P4,700,000, respectively. Windell opts to measure thenon-controlling at a fair value of P300,000. How much is the goodwill (gain onbargain purchase) as a result of the business combination?P Company purchases 80% of the outstanding shares of S Company for P9,000,000. The carrying value of S Company's net assets at the time of acquisition was P6,000,000 and had a fair value of P8,000,000. WHAT IS THE AMOUNT OF THE: c. Goodwill arising from the consolidation if it is to be computed using the full (fair value basis of "Full/Gross-up" Goodwill, assuming the cost of acquisition includes a control premium of P400,000. d. Non-controlling interest arising from the consolidation if it is to be computed using the full (fair value basis of "Full/Gross-up" Goodwill, assuming the cost of acquisition includes a control premium of P400,000.
- On July 19, 2021, SUNOB acquired 60% of the outstanding shares of YSAE. The business combination resulted to a gain on bargain purchase of P200,000. The consideration paid was exactly the fair value for the 60% outstanding stocks, and the fair value of the non-controlling interest is not given. Fair value of the net assets of YSAE amounted to P1,000,000 on that date. How much is the gain on acquisition attributable to SUNOB? Zero 600,000 200,000 120,000Gino Company acquired 30% of ABC Corporations share for P8,000,000 on July 1, 2020. ABCCorporation’s identifiable net assets on the date of acquisition are P20,000,000. Gino believes thatthe investee has known goodwill and the fair value of the corporation's net assets is the same as itscarrying amount except for the following: a. Equipment is undervalued by P2,000,000.b. Inventory’s fair value is P2,000,000 greater than its carrying amount. The equipment has a remaining life of 4 years and depreciated using the straight-line method. At theend of 2020, all inventories at the acquisition date are entirely sold.On November 30, ABC Corporation pays a P2,000,000 dividend to its shareholders. During the year,ABC Corporation reported a net income of P5,000,000, 40% of these were earned in the first half ofthe year. The fair value of ABC Corporation's shares held by Gino at the end of 2020 is P8,250,000.Requirements:1. Prepare the necessary journal entries to record the above transactions.2.…On January 1, 20X1, Par Inc acquires 85.77% of Sub Corp for $211,625 in cash. Immediately before the acquisition, the book value of Sub's identifiable net assets was $143,426 with a fair value of $161,060, while the book value of Par's net assets was $282,155. What will be the amount of total shareholders' equity on the consolidated balance sheet immediately after the acquisition if the fair-value-enterprise (FVE) method is used? $309,334 b. $333,129 c. $301,402 d. $317,265 e. $325,197
- On January 1, 20x1, Bass Co. issued equity instruments in exchange for 75% interest in Guitar Co. On acquisition date, Bass Co. elected to measure non-controlling interest at fair value. Bass Co.'s management believes that the fair value of the consideration transferred correlates to the fair value of the controlling interest acquired and that the fair value of the controlling interest is proportionate to the fair value of the remaining interest. Guitar Co.'s net identifiable assets have carrying amount and fair value of ₱300,000 and ₱360,000, respectively. The difference is attributable to a building with a remaining useful life of 6 years. The December 31, 20x1 statements of financial position of Bass Co. and Guitar Co. are summarized below: Bass Co. Guitar Co. ASSETS Investment in subsidiary (at cost) 300,000 - Other assets 1,372,000 496,000 TOTAL ASSETS 1,672,000 496,000 LIABILITIES AND EQUITY Trade and other payables 292,000 120,000 Share capital 940,000 200,000 Retained…The Sylvia Company acquired a 70% interest in The Clarke Company for 1,420,000 when the fair value of Clarke’s identifiable assets and liabilities was P1,200,000. Sylvia acquired a 65% interest in The Homer Company for P300,000 when the fair value of Homer’s identifiable assets and liabilities was P640,000. Sylvia measures non-controlling interest at the relevant share if the identifiable net asset at the acquisition date. Neither Clarke nor Homer has any contingent liabilities at the amounts in their financial statements. Annual impairment reviews have not resulted in any impairment losses being recognized.Under PFRS 3 Business Combinations, what is the goodwill that should be included in Sylvia’s consolidated statement of financial position?a. 580,000b. 0c. 600,000d. 540,000Parent Company purchases 80% of the outstanding shares of Subsidiary Company for P9,000,000. The carrying value of Subsidiary Company’s net assets at the time of acquisition was P6,000,000 and had a fair value of P8,000,000. Determine the following: What is the Goodwill arising from the consolidation if it is to be computed using the full fair value basis of “Full/Gross-up” Goodwill, assuming the cost of acquisition includes a control premium of P400,000?
- BLACKPINK Company acquired a 70% interest in the LISA Corp. for P1,420,000 when the book valueof LISA’s identifiable assets and liabilities was P1,200,000; land was undervalued by P200,000.BLACKPINK acquired a 65% interest in the MANDU Inc. for P300,000 when the fair value ofMANDU’s identifiable assets and liabilities was P640,000. BLACKPINK measures non-controllinginterest at the relevant share of the identifiable net assets at the acquisition date. Neither LISA norMANDU has any contingent liabilities at the amounts in their financial statements. Annualimpairment reviews have not resulted in any impairment losses being recognized. Requirement:Under PFRS 3, compute for the goodwill that should be included in BLACKPINK’s consolidatedstatement of financial position.On January 10, 2020, Fey Co. acquired a 40% interest in Hana Co. for P4,800,000. Fey already held a 25% interest which had been acquired for P1,600,000 but which was valued at P1,920,000 at January 10, 2020. The fair value of non-controlling interest(NCI) at January 10, 2018 was P2,400,000, and the fair value of the identifiable net assets of Hana Co. was P8,400,000.How much is the goodwill to be recognized as a result of business combination?
